By Lee Su Shyan

FEWER than a third of Asia-Pacific chief executive officers (CEOs) say they are confident of their companies' business prospects over the coming year, a new survey has found.

The figure - 31 per cent - is down sharply from the 56 per cent who reported they were upbeat in late 2007, reflecting just how suddenly the global financial crisis has hit home. The survey was conducted by PricewaterhouseCoopers (PwC) in the final quarter of last year and covered 1,124 CEOs worldwide, including 276 from the Asia-Pacific.

PwC's executive chairman in Singapore, Mr Gautam Banerjee, said: 'Singapore, as with the other major financial centres, has been quickly and intensely affected. Without doubt, the current state of the economy means that it is not 'business as usual' for many companies.

Globally, only 21 per cent of CEOs reported feeling confident about revenue growth - a dramatic decline from 2007's level of 50 per cent.

Other findings all point to bosses feeling much more fearful over the prospects for the economy.

The Asia-Pacific CEOs say their top concern is how prolonged the recession will be among the world's major economies, such as the United States.

Singapore, for example, which has a large external economy, has seen exports slide as the US economy weakens.

As a sign that funding is tight across the region, 71 per cent of Asia-Pacific CEOs expect that most of their companies' growth will have to be financed from internal cash resources.

Four out of five of these head honchos say that problems in the capital markets are cause for concern for business growth. As a result, expansion in the near future will come from joint ventures and strategic alliances, the survey found, rather than cross-border mergers and acquisitions (M&As).

Mr Banerjee said: 'CEOs have had to contend with a lack of capital, tight credit conditions and uncertainty around company and asset valuations.' This may explain why CEOs will be choosing to enter such collaborative agreements 'in order to spread the cost and risks associated with cross-border arrangements'.

M&A activity has fallen sharply - with only 19 per cent of Asia-Pacific CEOs having completed a cross-border deal in the past year - another sign pointing to lower confidence and a system less flush with funds.

Nearly all of them recognise that to maintain growth in the long term, they will have to focus on retaining key talent. They cite other important factors such as high-quality customer service offerings, as well as brand strength and reputation.

Asia-Pacific CEOs also said that one factor holding them back from downsizing is that they would be losing skilled staff. Three-quarters of the chiefs believe in creating more flexible work environments and that redeploying key talent will help them retain staff.

This article was first published in The Straits Times on February 05, 2009.