DAVOS, Switzerland — Amid growing concerns over the global economy, the United States has overtaken China as the number one investment destination among chief executives around the world, a survey found Tuesday.
That's the first time the U.S. has topped the list since accounting and consulting firm PricewaterhouseCoopers, or PwC, first started asking the question five years ago. It's a clear sign that the business community is increasingly encouraged by the U.S. economy's vital signs at a time when China's growth is coming off the boil and executives are increasingly pessimistic over the global outlook.
"The U.S. for the first time in a number of years is the number 1 destination point for investment coming from CEOs,"
"I think you are seeing a real movement to economies that offer some real degree of stability from a business investment point of view, and that's interesting trend from what we've seen in the past," Dennis M. Nally, the firm's chairman told The Associated Press in an interview ahead of the gathering of the business elite at the World Economic Forum in the Swiss ski resort of Davos.
One of, if not the, major reasons why the U.S. economy is considered to be the most important market for growth in the coming year is the fact that CEOs are more pessimistic about the global economy's prospects than they were a year ago. In its survey, PwC found that 37 percent of executives polled think the outlook will improve over the next 12 months, down from 44 percent last year. Meanwhile, 17 percent think the outlook will improve, more than double last year's figure.
Nally blamed geopolitical tensions, big movements among currencies and the sharp fall in oil prices, among other factors, for the growing economic gloom.
"With all the things that are going on out there, CEOs are less confident about global growth than they were just 12 months ago," he said.
The downward drift in sentiment identified by PwC is not uniform around the world. Perhaps unsurprisingly, given the conflict that erupted in Ukraine last year, it's CEOs in Central and Eastern Europe that are the most downbeat. Their counterparts in the Asia-Pacific region and the Middle East have a far more rosy outlook.
One country that is clearly feeling the heat is Russia, where optimism has hit an all-time low, following a year that's seen the country embroiled in the crisis in Ukraine and suffering sanctions from Western powers in response. Russia has also suffered from the sharp fall in oil prices — its economy is hugely dependent on oil revenues — and seen its currency, the ruble, tank.