More than half of U.S. industry leaders believe that their firms have been hit by the ongoing debt crisis in the eurozone, research has shown.
A global survey of top CEOs, carried out by leading think tank PwC, also showed that bosses' commitment to do more business globally is gradually increasing, irrespective of the fragile recovery and uncertain economic climate.
According to PwC's 15th Annual Global CEO Survey, more than three quarters of U.S. company bosses think that the federal government did not do its part to effectively deal with the implications of the global economic crisis. A similar proportion is also not quite happy with the U.S. government's measures to cut budget deficit and debts.
The majority of CEOs are positive about the growth prospects of Asia and other fast-emerging markets. But despite the high business potential, the U.S. has a very limited business presence in the emerging markets, they told the survey.
Only about a third have key stakes in Asia or Latin America, and even fewer have a presence in Africa or the Middle East, the survey noted. Nearly 40 percent of U.S. CEOs are planning to expand their business beyond the boundaries of North America in 2012 compared to just 25 percent last year, the study has found.
Worldwide, 28 percent of bosses are looking forward to make a cross-border merger or acquisition in 2012, the PwC has said.
In the context of the developing debt crisis and the predictions of a double-dip, there is a continued focus on corporate restructuring and cost cuts. Two-thirds of U.S. CEOs plan cost cutting in 2012 against 77 per cent in 2011, the survey has found.
We certainly see that the debt crisis in Europe could get dramatically worse and that that could affect our operations, not just in Europe, but it could have some spillover into the credit markets and therefore our operations around the world, said Michael Thaman, chairman of the board and CEO of Owens Corning.
Businesses are well aware of the threats faced by the U.S. to its long-held position as the world leader. China overcame the U.S. in the list of countries most preferred by companies for business growth prospects even as India and Brazil outshone western Europe's major economies as important markets for growth, the survey points out.
If China's economy keeps growing at seven percent a year and the U.S.'s grows at three percent, it will take them 30 years to become the biggest economy in the world. But they still won't have the same standard of living as in the U.S., meaning they can keep growing for a long time, said David Cote, chairman and CEO of Honeywell.
CEOs have varied views over the future prospects of the U.S. economy. Many industries feel that the economy is unlikely to progress much without a long-term solution to talent shortage it is currently facing. Many others have pinpointed the lack of long-term fiscal planning as one of the major factors that hamper sustainable growth.
The lack of a credible, long-term fiscal plan in the U.S. is probably our chief concern. The fact that there is not actually contributes to the market volatility. Just look at August of this past year and the debate about the U.S. deficit, and the inability for both political parties and the Obama administration to come together on the issue. We saw levels of volatility that are typically not seen, said William McNabb III, chairman, president and CEO, Vanguard Group.