Worldwide economic prospects take toll on Asia-Pacific outlook

Carried out by PwC International Survey Unit, the APEC CEO Survey 2012 was conducted between June and August, 2012 covering 376 CEOs and industry leaders in 40 economies, including all the 21 APEC economies. This is a very important survey conducted annually by PwC as the Knowledge Partner of the annual APEC Summit.

The survey has discovered that Asia-Pacific CEOs remain confident of long-term growth.

Economic disruption, including possible recession in the US, the Eurozone crisis and the slowing of expansion in China have taken a toll on the confidence of CEOs in the Asia-Pacific region.

Just 36 per cent of executives surveyed by PwC said they are “very confident” of business growth over the next 12 months.

Longer term, however, prospects improve, with more than half (54 per cent) expressing a high level of confidence for the next three to five years.

CEOs called for action on regulation, investment policies and labour mobility. Asia-Pacific CEOs also said they believed the region was on track to achieve greater economic integration, a top priority for the APEC Forum.

Nearly half of CEOs said removing barriers to trade in services was a key to greater integration within the 21 APEC members.

CEOs also called on APEC’s political leaders to harmonise regulations across the region and to do more to encourage labour mobility and the free flow of investment.

CEOs said the top economic risks to their growth were a spike in oil prices to beyond $150 per barrel, a US recession, breakup of the Eurozone, and the slowing of China’s growth to below 7.5 per cent of gross domestic product.

Other top concerns cited were a major disruption of the Internet or cyber attack, and a pandemic or natural disaster. Asia-Pacific CEOs said China and the United States were their dominant targets for investment over the next three to five years. Resource-rich areas such as Russia, Indonesia and Australia, and Asian services capitals like Hong Kong and Japan were also cited as top draws for investment.

Meeting the need for talented, highly skilled workers remains a top priority for CEOs in Asia-Pacific. Some 40 per cent said they planned to expand their workforce by at least 5 per cent in the next three to five years. However, 42 per cent think talent shortages in the region will worsen over the same time period.

To meet the intense competition for talent, CEOs said they will offer employees salaries that are more competitive, better apprenticeship and intern programs, more non-financial rewards and customised benefits, and international assignments.

“Making progress on the many issues that face the diverse economies of the Asia-Pacific region is no easy task. CEOs have set some very clear challenges for the upcoming APEC Summit. If the summit is to be deemed a success, we need to see some real progress on key issues such as harmonising regulation and encouraging labour mobility in the APEC region,” said Dennis Nally, chairman of PricewaterhouseCoopers International Limited.