KEY POINTS:
DAVOS, Switzerland - Leaders of the world's top companies are meeting this week in Davos in buoyant mood.
With the global economy enjoying one of its longest periods of growth since World War Two, confidence about corporate revenues is running at record levels, according to a survey by
consultant PricewaterhouseCoopers (PwC) released today.
Over 90 per cent of 1,100 chief executives surveyed expected revenues to grow over the next 12 months and a similar number see sales continuing to expand during the next three years.
In all, 52 per cent were "very confident" and 40 per cent "somewhat confident" about their business in the year ahead -- a marked turnaround from five years ago when levels were half that.
The upbeat mood reflects a corporate world basking in the benefits of four consecutive years of strong economic growth. That benign backdrop has also helped lift stock markets to new peaks this month.
According to the International Monetary Fund, global growth will remain solid in 2007 at close to 5 per cent, despite an expected slowdown in the US economy.
Dynamic growth in China, India and other emerging markets is the economic highlight for many business leaders.
"CEOs around the world are increasingly positive about their ability to grow their companies and take advantage of the opportunities globalisation offers for new markets, new products and new customers," PwC Chief Executive Samuel DiPiazza said.
Still, Gene Donnelly, head of the global advisory practice, says top executives remain level-headed.
"When you take it down a level and look at the emphasis on mergers and acquisitions, for example, their intention -- at least as told to us -- is to finance nearly all of that with internal free cashflow rather than going to the debt markets," he said. "So, it seems to be a rational optimism."
The upbeat mood was echoed by others monitoring the corporate pulse around the world.
"Across our client base there is a high level of optimism, both in North America and across Europe," said David Thomlinson of rival consultancy Accenture.
CLIMATE THREAT
Nonetheless, there are clear risks.
In addition to worries about terrorism and international security, the environment is moving decisively up the corporate agenda.
Forty per cent of CEOs in the PwC survey expressed concern about the threat posed by climate change. This figure dropped significantly, however, to only 18 per cent among North American executives.
Although the world has yet to devise a coherent strategy for fighting climate change, a growing number of CEOs appear to believe carbon emissions could become a serious cost for their business and failing to act also risks alienating environment-conscious customers.
A separate Gallup survey of participants at the World Economic Forum annual meeting in Davos found one in five now ranked the effects of climate change as an issue that leaders should concentrate on -- double the level recorded in 2006.
- REUTERS