January 25 2004--Confidence grows but costs still under the microscope says a new survey of 527 executives by the Economist Intelligence Unit.

"CEO Briefing - Corporate priorities for 2004"

Confidence and caution both run through the results of this year's CEO Briefing, an annual Economist Intelligence Unit survey and interview programme aimed at senior executives around the world. As part of the research the Economist Intelligence Unit surveyed 527 executives, including 112 chief executives, from 76 countries, and conducted in-depth interviews with 35 corporate leaders.

"CEO Briefing - Corporate priorities for 2004" is sponsored by Dimension Data, HP, Nortel Networks and Oracle.

The key findings:

* Optimism has grown. Executives are considerably more optimistic about global business prospects this year than they were at the start of 2003. As 2004 begins, 76% of the survey respondents regard the prospects for business as good or very good, up from 61% twelve months ago. Executives see the best growth opportunities in Asia, with a particular focus on China.

How do you view the prospects for business in the global marketplace over the coming three years? (% respondents)

    This year    Last year
Very bad    1%    1%
Bad    5%    16%
Indifferent    18%    22%
Good    69%    55%
Very good    7%    6%

* Exuberance is strictly rational. Despite the more promising signs for 2004, the general expectation among respondents is for modest growth in revenues and profits, rather than for robust growth. Almost three in five expect only modest growth in revenues and profits this year; a further 9% do not expect revenue growth at all but will continue to increase profitability through further cost-cutting.

* Cost-cutting remains a priority. Worries about global political, financial and economic instability may have receded since the last survey but competitive pressures remain intense—they pose the key risk to respondents' business. Lowering costs remains a strategic priority as a result.

* Outsourcing is mainstream. Outsourcing has emerged as a key preoccupation for business. More respondents identify it as a critical force in the global business environment than any other. IT, HR and logistics are the areas where the survey respondents are most receptive to outsourcing. They tread more warily in areas such as finance and accounting, customer contact roles and research and development.

* Productivity is a key watchword. Companies will focus on keeping unit costs under control even as they scale their activities back up. Suppliers hoping for a softer ride from their customers are likely to be disappointed.

* Governance is not a fad. Corporate governance remains a major challenge for executives, and concern is rising fast about new regulations and a higher compliance burden. In the list of risks facing respondents, this one jumps highest year on year.

* Financial services are set to rebound. Sentiment about financial services has brightened substantially compared with last year's survey. This year, 49% of respondents picked the industry out as having excellent growth prospects, against just 29% in 2003. Private equity is an area with particularly bright prospects.

* Technology is essential to growth. Only 5% of respondents do not regard technology as essential or important. Improved sales and marketing has replaced reducing costs as the main aim of technology investment in this year's survey.

* EU enlargement is a big deal. Respondents picked the expansion of the EU from 15 to 25 member states as the most important scheduled event of 2004, ahead even of the US presidential election.

* The customer remains king. Increasing customer satisfaction is once again respondents' top strategic priority. Building closer relationships with existing customers is regarded as the best way to maximise growth opportunities.

"CEO Briefing - Corporate priorities for 2004"
is available free of charge at Executive Briefing (www.eb.eiu.com), an Economist Intelligence Unit website providing strategic intelligence for global executives.

Editorial enquiries:
Louisa Vinton : +1 212 554 0656; louisavinton@eiu.com
or Andrew Palmer : +44 (0)20 7830 1149; andrewpalmer@eiu.com

Editor's notes:
About the survey respondents
527 executives from 76 countries around the world participated in this year's CEO Briefing survey, which was conducted in December 2003. The US and the UK provided the largest number of respondents, but a remarkably diverse group of executives, based in locations from Argentina to Vietnam, gave their views. As well as being highly cosmopolitan, the survey group was very senior. Over one in five respondents was a CEO, up from 13% of respondents in the last survey; other respondents included 11 chairmen, 25 CFOs, 74 directors and 45 senior vice-presidents. A range of industries was represented—as in the last survey, financial services, professional services, and telecoms and IT accounted for the most respondents. Participants also came from a spread of company sizes, with a third reporting annual revenues of over US$1bn.

About the Economist Intelligence Unit
The Economist Intelligence Unit, the business information arm of The Economist Group, publisher of The Economist, is the world's leading provider of country intelligence, with over 500,000 customers in corporations, banks, universities and government institutions. Our mission is to help companies do better business by providing timely, reliable and impartial analysis on market trends and business strategies.

About Dimension Data
Dimension Data Holdings plc is a leading global IT services company that provides networking, enterprise systems, security, application integration, e-business and managed services. Dimension Data builds and manages the IT infrastructures that enable companies to collaborate like market leaders. Focusing on the convergence of application integration and network infrastructure, Dimension Data provides the business and technology solutions its customers need to partner seamlessly.

About HP
HP is a leading global provider of products, technologies, solutions and services to consumers and businesses. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. HP completed its merger transaction involving Compaq Computer Corp. on May 3rd 2002.

About Nortel Networks
Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Wireless Networks, Wireline Networks, Enterprise Networks, and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at www.nortelnetworks.com.

About Oracle
Oracle is the world's largest enterprise software company. For more information about Oracle, visit our Web Site at http://www.oracle.com.





This article courtesy of http://www.microscopelab.com.
You may freely reprint this article on your website or in
your newsletter provided this courtesy notice and the author
name and URL remain intact.

Submit Your Article