Business

South Africa outlook positive: CEOs

28 January 2010

An overwhelming 93 percent of South African CEOs expect the local economy to show signs of recovery during 2010, according to a survey by professional services firm PricewaterhouseCoopers. Looking further ahead, they are even more confident.

The company's 13th Annual Global CEO Survey includes a South African-specific CEO survey for the first time.

The survey found that 90 percent of South African CEOs were confident about short-term (next 12 months) revenue growth prospects for their companies, with the global average 81 percent.

It also found that with the external environment remaining unpredictable, South African CEOs believed better penetration of existing markets held the most promise for business growth in the short term.

"Some indicated that new geographical markets and mergers and acquisitions also offer potential for business growth."

On a longer, term-three year view, South African CEOs were even more confident when it came to growth prospects, with 97 percent saying they were confident while the global average was 92 percent.

Most African CEO respondents indicated they were "very confident" on the long term outlook, pointing to the immense growth potential of the continent's emerging economies.

Turning to recruitment, the study found that almost 40 percent of South African CEOs expected to increase their head count this year, with 20 percent planning to decrease their staff complement.

Two-thirds of South African CEOs plan to increase their long-term investment in leadership and talent development.

While the global recession might be showing signs of lifting, the threat of it being protracted remained the most significant concern of global CEOs.

"South African CEOs continue to be troubled by a host of other perceived threats to their businesses' growth prospects, including exchange rate volatility, over-regulation, the skills shortage, energy costs, lack of infrastructure and capital market instability," the study said.

Fear of over-regulation was, however, not a uniquely South African worry, with 60 percent of global CEOs sharing the same anxiety.

The survey found the recession had promoted risk management to the top of many board agendas, with 67 percent of South African and African CEOs set to increase focus on embedding risk management protocols into business units.

Since South Africa had arguably been less adversely affected by the global economic crisis than many other countries, it was noteworthy that South African CEOs indicated their boards of directors were modifying their behaviour as a result of the economic crisis.

"This is to a greater extent than their global counterparts," the study said.

Sapa