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Cyprus CEOs less confident about growth prospects

24 February, 2014

… but bigger chance of maintaining workforce than last year

Business leaders in Cyprus are less confident about the growth prospects of their company over the next 12 months, according to the local results of PwC’s 17th Annual Global CEO Survey released Tuesday. Only 32% said in the survey they are confident that their revenues will grow during 2014, whereas the respective responses reached 71% and 85% in the Eurozone and globally.
However, CEOs in Cyprus feel more optimistic about their medium-term growth prospects with 75% expressing confidence about their prospects for increased revenues over the next three years.
This year’s survey included 70 CEOs who shared their thoughts and concerns regarding the future of their companies. The survey also includes two interviews with George Petrakides, Country Manager of Microsoft Cyprus and Philip Van Dalsen, CEO of MTN Cyprus who provided an in-depth analysis of their views.
According to the survey results, 29% of participants see product and service innovation as the main opportunity for revenue growth followed by new markets (23%) and increasing share in existing markets (23%).
As regards the economic and policy threats faced by businesses today, CEOs in Cyprus are mostly concerned about the government’s response to fiscal deficit and debt burden (83%), the increasing tax burden (77%) and the lack of stability in capital markets (70%).
In addition, for the second consecutive year, the survey identified bribery and corruption (66%) as one of the most important business concerns for CEOs, followed by high or volatile energy costs (63%) and a shift in consumer spending and behaviours (63%).
Asked about their restructuring plans over the next year, 93% of CEOs in Cyprus cited cost reductions, followed by entering into a new strategic alliance or joint venture (33%). According to the survey, even though CEOs are focusing on cost reductions, 60% of the respondents believe that their headcount will remain the same over the next 12 months when the respective percentage in 2012 was 31%. The rate of CEOs who say that their headcount will decrease during the next 12 months has dropped to 23% from 50% in 2012, offering a note of optimism to the economy and society in general.
About 40% of CEOs have seen a positive change in their relationship with clients. However, they feel that the level of trust that providers of capital (57%) as well as the government and regulators (51%) have in their industry has deteriorated.
Concerning the role of the state, 93% believe that the government should first ensure financial sector stability and access to affordable capital and then create a more internationally competitive and efficient tax system (47%) in order to attract investments and new capital.
The local findings were be presented during an event with a presentation by Philippos Soseilos, Advisory Services Partner at PwC Cyprus and a panel discussion with George Petrakides of Microsoft, Phidias Pilides, President of the Cyprus Chamber of Commerce & Industry, Philip Van Dalsen of MTN and Christopher Pissarides, Professor of European Studies at the University of Cyprus and chairman of the president’s advisory National Economic Council.
The findings of the survey are available at the PwC Cyprus website at
www.pwc.com/cy .