Aussie CEOs prepare for year of cost-cutting

Nicola Riches
By Nicola Riches | 20 January 2016

73% of Australian CEOs plan to use the next year to introduce a wave of cost-cutting measures, outstripping their global counterparts where only 68% intend on embarking on the same strategy.

PwC’s 19th Annual Global CEO Survey, launched at the World Economic Forum in Davos, Switzerland yesterday, shows that roughly a third of Australian CEOs are ‘very confident’ they will see revenue growth, down from 43% last year.

41% said their headcount will decrease over the next 12 months, in comparison to 43% who say there will be an increase. 16% plan on maintaining their current staff levels.

Interestingly – perhaps in light of oncoming media reforms and changes to the mining industry - 39% of Australian CEOs surveyed believe they will complete a domestic merger and acquisition.

“Australia’s 24 years of uninterrupted economic growth is frequently highlighted, but we mustn’t forget the history of difficult reforms that made this record possible,” PwC Australia CEO Luke Sayers told reporters.

“If the next quarter-century is going to look anything like the last, it’s crucial that the lessons of the past are applied. In 2016 we need to see a shared vision and a long-term economic and fiscal plan that outlives the next election cycle,” he adds.

The report states that the US (39%), China (34%) and Germany (19%) remain the markets of most significance to local CEOs, while only 8% think that global growth will decline in the next 12 months, whereas 23% of company leaders elsewhere in the world believe it will.

Unsurprisingly, almost all - 98% - are confident that their company's prospects for growth are good. However, 44% believe there are more threats to their firms than there were three years ago, while 41% are of the opinion that there are more opportunities.

86% concur that technological advances will transform their businesses in the next five years, while 49% believe climate change and resource scarcity will shift their businesses to new ways of working in the same time frame. 57% of local CEO’s believe that local demographic shifts will hit transform their companies.

49 Australian CEOs took part in the survey, including Wesfarmers chief executive Richard Goyder, and Mirvac’s Susan Lloyd-Hurwitz. 

Email Nicola at nicolariches@yaffa.com.au.

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