Asia Pacific CEOs emerged as the most optimistic about the prospects for a stronger economy in the coming year, according to a survey.

The PwC’s 25th Annual Global CEO Survey - Asia Pacific, which polled 4,446 global CEOs including 1,618 from Asia Pacific between October and November 2021, showed that 76 percent of respondents predict the global economy will improve, while only 17 percent expect worsening conditions.

“Corporate Despite an array of shifting headwinds, the CEOs that we surveyed in the region are the most optimistic they have been in ten years about the prospects for a stronger economy in the coming year,” the survey showed.

The year’s optimism is three percentage points higher than the 73 percent optimism level from a year ago and a full 41 points higher than 2020, when almost half (48 percent) of Asia Pacific CEOs predicted a declining economy.

Optimism is trending upwards in most countries within Asia Pacific — the most positive being India, Indonesia, Malaysia and Singapore where ~90+ percent of CEOs anticipate global growth in the coming year. However, CEOs in China are feeling less optimistic than they were a year ago, down 9 points to 62 percent.

Confidence in global economic growth translates to a high degree of optimism for Asia Pacific CEO’s own businesses: 50 percent are “very confident” or ‘extremely confident’ in 12-month revenue growth prospects.

Bob Moritz, Global Chairman, PwC said: “While the ongoing pandemic and emergence of new variants cast a shadow over the year, the high level of CEO optimism we found speaks to the strength and resilience of the global economy and the ability of CEOs to manage through uncertainty. There is nothing “normal” about the world we are working in, but we are getting used to it. We are seeing differences in confidence among countries, and there is no shortage of challenges to navigate, but it is encouraging that CEOs we spoke with on the whole feel positive about 2022.”

CEOs’ optimism is high for the most part, but they are also well aware of potential threats that could impact their companies over the coming 12 months.

Asia Pacific CEOs rank health risks (58 percent) as their top priority to address (the exception is China with only 42 percent of CEOs with a high level of concern over health risks). It is a clear ten percentage points higher than their global peers who list cyber as their most pressing concern. Not far behind for Asia Pacific CEOs is cyber risk (44 percent) and macroeconomic volatility (43 percent).

This difference reflects the fact that while Asia Pacific’s recovery is optimistic, it continues to be challenged with new, highly transmissible variants and uneven vaccination rollouts. Only China rebounded faster than the rest of the region and is now experiencing growing pains in the form of inflation, real estate bubbles, and supply chain disruptions.

Raymund Chao, PwC Asia Pacific and China Chairman, commented: “In 25 years of documenting CEO sentiment toward and reactions to transformative trends, our inaugural Asia Pacific report highlights more than ever the unique challenges facing senior executives in the region. Translating global and regional economic fundamentals into revenue growth remains the priority. What we are seeing is a diversification of those growth pathways with an increasing regional focus: goods and services produced and delivered in Asia for Asia, leveraging the very best of technology capabilities and local talent. In accessing and growing local talent pools, prioritising their health and wellbeing is key. Our findings also reveal a growing interest in embedding ESG practices into business resilience and transformation initiatives. This presents a real opportunity for business leaders to build trust and drive sustained outcomes for all - underpinning PwC’s very own New Equation strategy.”

Asia Pacific CEOs are ahead of their global peers in net-zero and carbon-neutral commitments: 60-69 percent of CEOs in the region have made, or are progressing a net-zero and/or carbon-neutral commitment - a clear 9-13 percent ahead of global peers. In addition to those CEOs that have made net-zero commitments, 11 percent more Asia Pacific CEOs (77 percent vs. 66 percent global CEOs) have had their approach independently assessed and validated. A higher proportion of Asia Pacific CEOs have also embedded these emissions targets into their strategy (43 percent vs. 37 percent global CEOs).

Despite rising interest in climate change, non-financial outcomes as well as ESG, strategy is still primarily driven by business metrics such as customer/staff satisfaction and automation/digitization goals. Much less well-represented, in strategies and compensation, are targets related to greenhouse gas (GHG) emissions and gender representation or racial and ethnic diversity: 19 percent or fewer of Asia Pacific CEOs have such targets in their annual bonus or long-term incentive plan.

Roderick Danao, PwC Philippines Chairman and Senior Partner, expressed hope: “It seems that better days are ahead of us. We hope we can continue the momentum and sustain the growth trajectory of our respective companies. May Philippine business grow in a sustainable manner, taking into account their positive impact on the environment, social development and welfare of broader stakeholders.”