US CEO Confidence Rebounds as Growth and Sourcing Opportunities Emerge
The relatively slower recovery in the US has not deterred CEO optimism. Three years after the start of the recession, US CEOs' short-term confidence has returned to pre-2007 levels and moved back in-line with CEOs around the globe. Almost three-fifths (56 percent) of US CEOs are very confident about business prospects over the next 3 years, according to PwC's 14th Annual Global CEO Survey.
US CEOs who indicate they are "very confident" over the next 12 months rose 10 percentage points from 2007 (35 percent) to 2010 (45 percent), after an extreme dip to 15 percent in 2008 and coming closer to 2006 levels, when 53 percent of US CEOs were very confident in their outlook for revenue growth.
Sources of Growth: Capitalizing on Quality and Innovation
PwC's survey found that US CEOs are expecting to grow their operations internationally, particularly in Asia and Latin America. But growth may not come exclusively from emerging markets. Sourcing within the US seems to be a significant driver of opportunity, as CEOs outside the US see the US as both a market opportunity and a sourcing solution.
In fact, the US is next only to China – and ahead of India and Brazil – as the country most important to CEOs' sourcing needs. These business leaders cite the higher quality of products and services that US companies can produce, but also a number of other advantages: financially-stable, cost-competitive suppliers; companies with decades of proven experience serving international markets; the US's extremely low overall risk profile; and business partners capable of innovating products on the fly.
Leading firms in other countries are also looking to the US for market potential. Once again, after China, the U.S. was the country most often named by non-U.S. based CEOs as important to growth prospects over the next three years – ahead of Brazil, India and Germany. US CEOs recognize these opportunities, as 68 percent say they plan to increase their commitment to generating innovations and safeguarding intellectual property over the next three years.
"Emerging-market-headquartered companies are enhancing their global networks of suppliers and partners," said Bob Moritz, Chairman and Senior Partner, PwC US. "There is a tremendous potential here to create new opportunities, including jobs, to revitalize the US economy. A renewed focus on quality, innovation and talent pools – where we appear to have a competitive advantage – will further establish the US as an attractive sourcing location for these companies."Continued on the next page