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CEOs in SA downbeat on global economic growth

Johannesburg - Chief executive officers (CEOs) of South African companies are less optimistic about global economic growth, according to PwC’s 19th global annual CEO survey.

The survey, which discloses CEO confidence, concerns and threats, future growth plans and strategies, shows that just over a quarter of CEOs globally believe global growth will improve over the next 12 months.

A total of 1 409 interviews in 83 countries were conducted during the fourth quarter of last year. The global survey results were released at the World Economic Forum (WEF) annual meeting in Davos. In South Africa 30 CEOs from a broad spectrum of listed and privately-owned companies participated in the online survey.

The survey took place amid slowing growth in developing countries especially China and falling oil and commodity prices. Significantly, it took place before the South African rand’s dramatic fall.

20% of South African CEOs said they anticipated global economic growth to improve in 2016, down from 29% last year. The global average in 2015 was 27%.

“The South African CEOs appear to be somewhat negative in sentiment, compared to their global counterparts,” PwC Southern Africa CEO Dion Shango said at the release of the survey’s results on Thursday.

37% of South African CEOs said they were “very confident” of growth in their own companies over the short and medium term.

South African CEOs cited implementing cost-reduction initiatives, entering into new strategic alliances or joint ventures and completing mergers and acquisitions domestically as the highest ranking activities in the next 12 months. S

hango said the CEOs were focused on managing factors within their control. “Cost reduction will be important in terms of bringing effectiveness in the next 12 months,” he said.

In the survey, the top three potential economic and policy threats highlighted by South African CEOs were government response to fiscal deficit and debt burden, social instability and high unemployment or underemployment.

In the South African CEOs view, US China, Germany and UK are among the key international markets for growth. Key markets for growth in Africa include Kenya, Nigeria, Zambia and Mozambique.  

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