Every year, the world's elite converge on Davos, a Swiss mountain village, to discuss the world and what they want to do to it. We're not invited but we end up paying the price for the mistakes that Davos Man makes. This year, Davos Man is feeling weepy. Let's hope that doesn't lead to a year of inaction on the world's pressing problems.
PriceWaterhouseCoopers (PWC), which is now famous for not catching a fraud of epic proportions at Satyam Computer Services (NYSE: SAY), has done a survey of Davos attendees which gives a flavor for just how pessimistic they are. It found that only 20% of 1,124 CEOs in 50 nations said they were very confident about prospects for revenue growth in 2009, down from half last year, and 25% said they were pessimistic -- this is the most gloomy result since PWC began tracking the CEO outlook in 2003.
CEO confidence about future growth has dropped since the beginning of 2008. 33% were very confident about growth in the next three years, down from 42% last year. Roughly 70% said their companies will be affected by the credit crisis -- and 70% said they would delay planned investments. Despite the gloomy outlook, only 25% of CEOs plan to cut payrolls in 2009, while 35% expect staff count to remain constant.
U.S. executives are the least confident while Indian executives are the most. The survey found 13% of U.S. executives are "very confident" about revenue growth in 2009, compared with 36% in 2008. In Europe the corresponding figures were 15% and 44%. By contrast, 70% of Indian executives expressed optimism about their company's growth as did 30% of those in Brazil, Russia and China.
I am afraid that the optimistic ones are just late to the pity party. One thing's for sure, things will be different in 2010. I just hope they'll be better.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College. Portfolio recently published his eighth book, You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing. He has no financial interest in Satyam securities.
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