CEOs across the Association of Southeast Asian Nations (ASEAN) are more optimistic about the outlook for their businesses and the global economy this year compared with 2020, according to PwC's 24th Annual Global CEO Survey.
ASEAN CEOs ranked pandemics and health crises as the biggest threat to their organisation's growth prospects, prompting them to make strategic changes to better manage unforeseeable risk, it revealed.
While welcoming the positive outlook, PwC Thailand's CEO Chanchai Chaiprasit said the Thai economy's prospects hinge on the country's ability to quickly rollout COVID-19 vaccines to the population. Cash flow and liquidity management also remain a top priority for many businesses.
The PwC survey of 5,050 CEOs across 100 countries and territories included 236 from ASEAN. Some 31% of those polled said they are very confident about their company's prospects for revenue growth over the next 12 months. That's up from 28% of CEOs in 2020.
They are also much more optimistic about the global economy, with 71% of business leaders in ASEAN predicting an improvement in 2021, up from just 16% of CEOs last year.
Similarly, 76% of global business leaders believe the world economy will improve in 2021, compared with just 22% in last year's survey - representing the highest level of optimism since PwC started asking this question in the 2012 survey.
"More than a year since COVID-19 brought the global economy to its knees, today there are glimmers of economic recovery in countries with larger economies.
"Others in the region are quickly vaccinating their populations, leading to improved overall business confidence and a return of economic activity," Chanchai said.
Pandemic and health crises emerge as top risk
Unsurprisingly, pandemic and health crises top the list of threats to growth prospects, according to 74% of ASEAN CEOs. This is followed by policy uncertainty (57%), over-regulation (52%), cyber threats (51%) and uncertain economic growth (47%), the survey showed.
Such threats have prompted ASEAN CEOs to focus more on risk management and preparing for systemic risk and low-probability, high-impact events.
ASEAN CEOs prioritise digital investments for the future
When asked about spending on digital transformation, more than half of CEOs (52%) in ASEAN projected increases of 10% or more as a result of the COVID-19 crisis. Additionally, 46% plan to adopt automation and key technologies to increase the efficiency and productivity of their workforce.
Despite cyber threats being among the top threats facing ASEAN CEOs, just 32% plan to boost investments in online security and data privacy.
Climate change not approached with urgency
Many leading global organisations have increasingly joined the race to show their commitment to reduce greenhouse gas emissions (GHG) ahead of the 26th UN Climate Change Conference of the Parties (COP26) set for later this year in Glasgow, UK. But the survey found that only 31% of CEOs in ASEAN are extremely concerned about climate change and environmental damage, on par with 30% of CEOs globally.
What's more, 21% of CEOs in ASEAN aren't concerned at all about this issue even though climate change greatly contributes to a series of business risks.
When asked about their investment plans on initiatives relating to Environmental, Social, Governance (ESG), just 22% of CEOs in ASEAN projected significant increases.
"The COVID-19 situation is putting CEOs in survival mode, prompting them to drive growth from cutting costs, increasing efficiency, focusing on organic growth and seeking strategic partners and joint venture opportunities," Chanchai added.
Vaccine rollout seen as crucial for Thailand's economic recovery
Chanchai said that 2021 will be a year full of challenges for Thailand, with the economic outlook highly uncertain.
Whether businesses will be able to recover quickly depends on the country's ability to control the latest wave of COVID-19 infections. Failure to get the virus under control may derail plans to reopen more broadly to foreign tourists in the fourth quarter of this year.
"The 2.6% GDP contraction in the first quarter[1] clearly indicates that new virus cases have dented private and public consumption. Almost every company in every industry has adjusted its strategy in response to the current situation, from managing cash flow to prioritising costs and spending plans in order to maintain liquidity for as long as possible to get through this difficult period," Chanchai said.
[1] Gross Domestic Product Q1/2021, Office of the National Economic and Social Development Council
Source: PwC Thailand