CEO confidence falls amid pandemic

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Firms, whether or not large or small, are struggling because the economic system slows down because of the coronavirus pandemic. —  PHILIPPINE STAR/MIGUEL DE GUZMAN

By Jenina P. Ibañez, Reporter

MORE than half of chief govt officers (CEO) are nonetheless confident of their corporations’ income progress over the subsequent 12 months, though general confidence declined resulting from uncertainty introduced by the pandemic, based on outcomes of the PwC Philippines-Administration Affiliation of the Philippines survey.

Outcomes confirmed that 59% of 161 CEO respondents had been assured that their firm will see income progress within the subsequent 12 months, however this was significantly decrease than the 88% final 12 months and 89% in 2018.

Extra CEOs answered the survey performed in July to August 2020, with lower than 130 respondents in every of the 2 previous years.

Majority of these surveyed had been within the know-how, manufacturing, financial providers, and outsourcing industries. Half of the respondents got here from massive companies, whereas 34% had been from medium-sized enterprises and 10% had been from micro and small companies.

The survey confirmed most CEOs anticipate income and gross sales losses in 2020, with a 3rd of respondents estimate 10-30% in losses and a fifth anticipate losses of 30-50%.

Amongst micro companies, a fifth of respondents anticipate over 50% in losses, in contrast with 13% of small companies and 9 p.c of each medium and enormous enterprises.

Round 58% are assured about their very own {industry}’s prospects for progress for the subsequent 12 months. Essentially the most assured CEOs belong to media and leisure, outsourcing, skilled providers, and know-how, whereas those that are least optimistic belong to the hospitality, automotive manufacturing, and retail industries.

“A few of these industries are badly hit, and a few of them thrive throughout the pandemic, however you possibly can say 40% — from the outcomes of the survey — had been badly hit,” PwC Philippines Chairman and Senior Associate Alexander B. Cabrera mentioned in a press convention on Monday.

The survey was performed after the stricter lockdown measures had been lifted and a few companies had been enhancing, PwC Philippines Offers and Company Finance Managing Associate Jade Roxas-Divanagracia mentioned.

“The final sentiment of the enterprise group of staying assured and optimistic can be consultant of what most companies would really see at the moment,” she mentioned.

Quarantine restrictions across the nation started easing in June, though Metro Manila briefly reverted to a stricter lockdown for 2 weeks in August.   

The survey additionally confirmed organizations are extra assured about longer-term progress, with 90% of respondents saying that they anticipate income progress within the subsequent three years. This displays their angle concerning the Philippine economic system, with 83% believing that it’s going to get well inside three years.

When it comes to GDP, 36% imagine that there will likely be greater than 4% gross home product (GDP) contraction this 12 months, whereas 27% mentioned that they anticipate one to 2 p.c GDP progress by subsequent 12 months.

The Philippine economic system entered a recession as GDP shrank by a report 16.5% within the second quarter. The federal government expects GDP to contract by 4.4-6.6% this 12 months.

Among the many key progress drivers recognized by the CEO respondents had been infrastructure, home consumption, and authorities spending.

The respondents additionally recognized the highest areas they imagine the federal government ought to deal with — the healthcare system, infrastructure, and agriculture. Round 70% mentioned that the federal government ought to present industry-specific measures to revive enterprise confidence.

COST CUTTING
The COVID-19 motion plans from CEOs are primarily cost-cutting measures, with 80% of respondents saying that they plan to implement some type of value containment.

Some 37% mentioned they would scale back the workforce and 24% mentioned they’d cancel deliberate acquisitions. Seven p.c mentioned they’d exit an abroad market to avoid wasting on prices.

As well as, 57% mentioned they may implement sustainable practices and at the least half mentioned they’d cancel deliberate capital investments and upskill the human assets staff.

As soon as the companies are capable of transition to on-site work, a lot of the CEOs mentioned they’d change office security measures, implement digital methods, develop everlasting distant work plans, and speed up enterprise course of automation.

Many are prepared to spend money on information platforms, contactless fee, and synthetic intelligence as 80% of the enterprise leaders mentioned they’d improve know-how and digital investments. Most plan to prioritize communication software program.

The office is anticipated to vary in response to the pandemic, with 73% of the enterprise leaders saying that their group may proceed to have a work-from-home coverage after the pandemic.

In the meantime, 40% imagine that there will likely be a discount in office house over the subsequent 12 months.






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