Daily Management Review

CEO Survey Concludes 2016 to be a Troubled Year for International Business


08/26/2015




CEO Survey Concludes 2016 to be a Troubled Year for International Business
The top corporate executives believe that next would be a tough ride for them according to a recent survey conducted among business executives.

The cause of worry that tops the list of the executives is the potential threat from ISIS and the majority believes that terrorism is “going to shake things up”.

The survey was conducted of the chief executives was conducted by A.T. Kearney. Results from the survey indicate that most of the top honchos of the corporate world
expect the business landscape next year to be marked by increasing operational difficulties, economic and geopolitical volatility.

Terrorism and the potential threat from groups like ISIS take the top spot among the factors that have caused the eye brows of the chief executives to frown when talking about the business prospects for 2016. The survey, which was made public on Tuesday, notes that 82% of the executives are of the opinion that volatility and terrorism will intensify later this year into next.

The American executives were among those surveyed by A.T. Kearney who were more worried about terrorism than anyone else outside of the terrorist hubs in Middle East and North Africa.

A majority of the CEOs were of the opinion that the most troubled and unstable regions next year would be the Middle East and North Africa. However some of the European executives (22%) felt that Russia, Eurasia and Eastern Europe would be politically tense, and executives from Asia said China (17%) and South Asia (15%) will be problematic.

Forty-two percent say geopolitics will be an important business challenge compared to only 29% who said bore the same opinion in 2014. 46% of survey respondents had policy and regulatory concerns are at the forefront citing it as one of their top operational challenges.

While 76% said that struggling emerging markets will make a comeback next year, 72% of the chief executives surveyed believe oil prices will remain low moving into 2016.

Over the last few weeks, the world economy has been tormented by the developments in the Chinese economy, the second largest economy of the world. The Chinese market lost all its gains that it had made this year in a period of a week.

The Chinese currency, yuan, was devalued three times by the Chinese authorities earlier this month against the dollar and allowed more room for the currency to trade. More recently, the Chinese People’s Bank cut interest rates in an effort to boost the slacking economy. The devaluation is seen as an attempt by the Chinese authorities to boost exports. This was seen as a signal from the Chinese authorities that all was not going well for the second largest economy of the world. The situation has not changed since the last month.

The survey included questions about the Chinese economic scenario and a majority of the respondents were of the view that the world economy would continue to be troubled with China but very few wanted to believe that the Chinese economy was in for a hard landing.

An over whelming 77% of the executives were certain that China’s economic growth will slow considerably over the next 12 months, to just 6%. This sentiment is indicative of the lack of belief among the executives about the transition of the Chinese economy from and exporting one to a consumption-based one.

(Source:www.forbes.com) 






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