Indian Newslink 1st APRIL 2018 Digital Edition

APRIL 1, 2018
Businesslink
New Zealand CEOs take a dim view of global economy
Venkat Raman
venkat@indiannewslink.co.nz
New Zealand may be
one of the best countries
in the world to
establish and run businesses,
but its Chief Executive
Officers (CEOs) are among the
most pessimistic people in the
world, according to the latest
PricewaterhouseCoopers (PwC)
Survey.
The Survey, released on March
15, 2018, said that only 32% of
New Zealand CEOs expect the
global economy to improve this
year. This contrasts with 59% of
CEOS in other countries expressing
optimism. China recorded
the highest, with 70% of its corporate
bosses optimistic of the
world economic growth.
Local confidence high
However, New Zealand CEOs
were more confident about the
growth of their own companies,
with 89% of the local respondents
saying that they were making
plans accordingly.
PwC New Zealand Chief
Executive and Senior Partner
Mark Averill said that local CEOs
were also looking at what they
can control, through cost-cutting
and building resilience into their
supply chain.
“The findings come at atime
when businesses are coming to
grips with achange in government,
aheightened focus on reg-
Mark Averill
ulation and the broader social
and environmental challenges
that could affect their growth,”
he said.
Uncertain start
According to Mr Averill, New
Zealand CEOs faced an uncertain
start to 2018, following the general
election on September 23,
2017, which coincided with the
PwC Survey and avolatile equity
markets this year.
“It is no surprise that CEOs
here are feeling more cautious.
While it might seem like CEOs
are pessimistic, our local respondents
are bullish about their
own growth prospects. They are
looking at what they can control;
their supply chains and expenses,
to get fit for the future,”
he said.
The risk factors
Terrorism and cyber-attacks
were among the top ten risks
that keeps CEOs awake at night,
the Survey found.
“CEOs are clearly getting up to
speed on digital and technology,
but the fact that cyber- attacks
are the top risk to growth shows
the vulnerability of New Zealand
organisations. All businesses are
now looking at the people and
capabilities that they will need to
transform their business models.
Digital and cyber security skills
are just the beginning; we have
to build diverse teams that can
cut across traditional business silos,”
Mr Averill said.
Among the other facts which
CEOs consider as ‘threats’ are
over-regulation, climate change
and populism.
“Dealing with uncertainty has
to be part of business planning
for 2018. We have to partner
across industries and between
government and business to address
social issues like cyber security
and climate change. This
means becoming nimbler and
developing a2018 agenda that is
agile enough to handle anything
that is thrown their way,” Mr
Averill said.
The Global Scene
However, the PwC Global
CEO Survey showed adifferent
picture.
Despite highly publicised
handwringing over geopolitical
uncertainty, corporate misbehaviour
and the job-killing potential
of Artificial Intelligence,
Chief Executives were optimistic
of the economic and business
environment, at least over the
next 12 months.
The Survey accounted for 1293
interviews in 85 countries.
The PwC sample was weighted
by national GDP to ensure
that CEOs’ views were fairly
represented across all major
countries. About 11% of the
interviews were conducted by
telephone, 77% online, and 12%
by post or face-to-face. All quantitative
interviews were conducted
on aconfidential basis.
The lower threshold for all companies
included in the top 10
countries (by GDP) was 500 employees
or revenues of more
than US$ 50 million. The threshold
for companies included in
11
the next 20 countries was more
than 100 employees or revenues
of more than US$ 10 million.
The Best Year- 2017
According to the Survey, 2017
will turn out to be the best year
that the global economy has
seen since 2010.
“This rising tide is not just an
overall macroeconomic phenomenon;
it is balanced across
regions. Most of the world’s major
economies are experiencing
positive growth in contrast
to the situation just afew years
ago. In 2015, Russia and Brazil
were in recessions brought on
by plummeting commodity prices
and political unrest,” it said.
The southern countries in the
Eurozone, notably Greece, were
on the brink of default, or in default
on their debt and threatening
to bring down the Euro.
“China’s surging growth had
taken ahit from the Shanghai
market crash. Now, global commodity
prices seem to have stabilised
at amoderate level.
Russia and Brazil have returned
to modest growth; China is doing
well, and the Eurozone has
mounted asteady recovery that
looks set to continue in 2018.
Even the UK economy, while
slowing this past year, has not
yet been severely impacted by
Brexit,” the Survey said.
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