Davos (Switzerland): Business confidence is bouncing back after the sharpest drop in economic activity since World War II, prompting more industry leaders to start hiring again, according to a survey on Wednesday.
Job creation plans, however, remain small-scale and largely concentrated in emerging markets, where the economic recovery has been strongest and wages are lower.
Growth hopes in the developed world remain markedly more subdued, the study found.
A PricewaterhouseCoopers (PwC) survey of 1,200 chief executives in 52 countries found 39% of industry bosses aimed to increase headcount in 2010, while 25% planned more job cuts, down from nearly half who slashed jobs last year.
“Last year we clearly were in a crisis mode,” said Dennis Nally, global chairman of the consultancy group.
“CEOs are much more optimistic today, although there is a fair amount of caution as well, and the concerns depend on where you sit. If you are a CEO in a developing country you are feeling much more upbeat than CEOs in the developed world.”
The survey was released on the opening day of the World Economic Forum, where 2,500 of the world’s business and political elite are meeting in the wake of the economic crisis.
Markets have been buoyed by $5 trillion of cheap money, designed to float the global economy off the rocks, but as governments and central banks prepare exit strategies many business leaders see only a slow recovery.
Companies have eased up on layoffs but remain reluctant to hire beyond the minimum needed to deal with the weak upturn.
“I don’t think for the next 12 months you are going to see any significant job creations coming out of this,” said Nally, noting even CEOs adding jobs are often expanding their workforces by 5% or less.
Still, things are looking a lot better than 12 months ago.
Overall, 81% of CEOs worldwide are confident about revenue prospects for the next 12 months, up from 64 percent a year ago, and 31 percent are “very confident”, up 10 percentage points from last year’s low.
PwC rival Accenture paints a similar picture of an improving business mood, but adds stock market expectations have been running ahead of the day-to-day reality experienced in corporate boardrooms.
“Everyone is trying to work out where we are in a cycle. But the interesting thing is that it is not one place because we are clearly in a multi-speed world at the moment,” said Mark Foster, Accenture’s group chief executive for management consulting.
Companies that have weathered the downturn in reasonable shape are now looking for opportunities to move ahead of rivals, as evidenced by Kraft Foods Inc’s acquisition of British chocolate maker Cadbury Plc, Foster added.
“If you are the first mover, there are bargains to be had. There is a window of opportunity over the next 12 to 18 months,” he said.