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Corporate executives are struggling to find paths to growth as the euro zone crisis stokes fears of a return to recession and developing economies lose momentum.
Leaders of top companies meeting in Davos this week are braced for further shocks in 2012 and, at the personal level, the strains are growing as the backlash over top pay increases at a time of rising unemployment.
This month's stock market rally may have leavened the mood but it has failed to dent the world's growing queue of jobseekers. Worryingly, that coincides with acute skill shortages in parts of the labour market and finding the right talent is a top concern for executives.
"Twelve months ago we were all looking forward to a pretty good 2011," said Manpower Chief Executive Jeff Joerres. "Twelve months later, here we are in a completely different world."
Only 40 percent of chief executives are "very confident" of revenue growth for their companies in the next 12 months, down from 48 percent in 2011, according a PricewaterhouseCoopers (PwC) (survey of 1,258 CEOs published on Tuesday.
Even so, business leaders, who are optimists by nature, remain more upbeat than two years ago and are a lot more hopeful for their own firms' prospects than for the wider economy. Just 15 percent expect the global economy to improve in 2012.
After the shocks of last year -- Europe's worsening debt and banking crisis, the downgrading of the United States credit rating, the Arab Spring and Japan's earthquake -- bosses believe they have learnt how to deal with increased volatility.
"There is a sense that we are living in a world where shocks come at us very quickly and we're getting better at living with that," said Joerres.
Big uncertainties for 2012 include increasing tensions over Iran, as well as elections in the United States and France.
The need for selective investment has never been greater and companies are having to look beyond overly simplistic emerging-market versus developed-world plays.
"This is a truly amazing time -- volatile, risky, uncertain," said Boston Consulting Group CEO Hans-Paul Buerkner.
The growing importance of emerging markets will once again dominate discussions between 2,600 of the world's business and political elite meeting at the World Economic Forum this week.
Advanced economies are likely to expand just 1.4 percent in 2012 while developing economies should still grow 5.4 percent, according to the World Bank.
It is a shift that PwC Chairman Dennis Nally describes as "the great rebalancing." Yet the trend hides complexity. Significantly, World Bank forecasts for both advanced and developing economies have been revised down from last June's levels of 2.7 percent and 6.2 percent, respectively.
Corporate gloom is deepest in Western Europe, yet Germany remains a bright spot, with the ZEW monthly poll of economic sentiment posting its biggest ever rise in January. In China and India, meanwhile, only just over half of CEOs are still "very confident," down from 72 and 88 percent a year ago, according to the PwC survey conducted in the last quarter of 2011.
"Some of the biggest dips in confidence levels are actually coming out of emerging markets, which I think confirms how connected economies are," said Nally.
$4.2 TRILLION OF CASH
Companies' response to tough times is to manage operations with ever greater efficiencies and keep a tight rein on cash.
Worldwide, corporates now hold $4.2 trillion US in cash, up 5 percent from a year earlier and much more than is needed for liquidity purposes, according to estimates from Citi this month.
Mark Spelman, Accenture's global head of strategy, believes companies are seriously concerned about the credit situation and recent pressures in the banking sector, particularly in Europe, which is likely to keep mergers and acquisitions subdued.
"Companies are not going to go out there and have exposed cash positions when they know that the big commercial banks are under a lot of pressure," he said.
The cautious approach, particularly in developed economies, provides no obvious relief to the labour market and the world's unemployed, who now number more than 200 million, according to the International Labour Organisation.
Yet one of the worrying quirks of the current environment is how global corporations continue to bemoan their inability to hire the right skilled workers, whether they be gifted computer programmers, master welders or talented middle managers.
The sluggish economy may actually be aggravating the problem, according to Manpower's Joerres, as senior managers opt to wait to find just the right match for job openings, saving money on the monthly payroll in the meantime.
The strains of the corner office, meanwhile, are building and the credibility of CEOs has slumped 12 points to 38 percent in the past 12 months, the biggest drop in nine years, according to an annual poll on trust by Edelman released in Davos.
The pressures are greatest for those bosses facing the biggest business challenges. A thick skin may be a prerequisite but there have been some high-profile casualties.
Antonio Horta-Osorio, CEO of Lloyds Banking Group, took a leave of absence from the bank in November to recover from fatigue, while Jeff Kindler of drugs giant Pfizer resigned just over a year ago to "recharge my batteries."
Jennifer Wild, a clinical psychologist at King's College London, who has been researching the cumulative effect of stress, thinks the problem gets scant attention, partly because of the tough economic backdrop.
"We're not at the point now where we're thinking more culturally about making the workplace healthier," she said.