Leaders of the world's top companies are meeting this week in Davos in buoyant mood. With the global economy enjoying one of its longest periods of growth since World War Two, confidence about corporate revenues is running at record levels and economists are bullish about the future.
According to a survey by consultant PricewaterhouseCoopers (PwC) released on Wednesday, over 90 percent of chief executives expect revenues to grow over the next 12 months and a similar number see sales continuing to expand during the next three years.
"Many of the dire predictions have not taken place. Not to say that a crisis may not occur but I think there is built-in stability in the world economic system," Jacob Frenkel, vice-chairman of American International Group Inc, told the World Economic Forum.
Laura Tyson, dean of the London Business School and a former White House economic adviser, said the global economy was rebalancing, higher oil prices had been absorbed and there were promising signs of Chinese exchange rate flexibility. "All those things suggest to my mind another Goldilocks year," she told a panel. "But the big bad wolf is often hiding in the forest and we economists can't see him."
In all, 52 per cent of 1,100 executives surveyed by PwC were "very confident" and 40 per cent "somewhat confident" about their business in the year ahead -- a marked turnaround from five years ago when levels were half that.
The upbeat mood reflects a corporate world basking in the benefits of four consecutive years of strong economic growth. That benign backdrop has also helped lift stock markets to new peaks this month.
According to the International Monetary Fund, global growth will remain solid in 2007 at close to 5 per cent, despite an expected slowdown in the US economy. Dynamic growth in China, India and other emerging markets is the economic highlight for many business leaders.
"CEOs around the world are increasingly positive about their ability to grow their companies and take advantage of the opportunities globalisation offers for new markets, new products and new customers," PwC Chief Executive Samuel DiPiazza said. Still, Gene Donnelly, head of the global advisory practice, says top executives remain level-headed.