The rising drumbeat of war against Iraq has fallen on largely deaf ears in Bermuda's boardrooms. Nor does the threat of terrorism loom large as a major business concern.

Instead, bosses are far more concerned about issues closer to home - such as labour relations and immigration.

Increased competition is also a big headache, particularly for those in the telecommunications industry.

The mood on Bermuda's economy and business prospects was generally upbeat.

The survey said: "There are numerous reasons that Bermuda business leaders might be negative about prospects in 2003. The continued weakness of Bermuda's tourism industry; depressed world financial markets; and the threat of war are but a few.

"On the other hand, the sudden and dramatic inflow of business in the international insurance and reinsurance sector since 9/11 is reason enough for many business leaders to be positive.

"On balance, our survey reveals that Bermuda CEOs remain relatively optimistic about the Bermuda economy. Moreover, they are confident in the future for their companies - both for 2003 and over the longer term."

About two-thirds of CEOs believed the Bermuda economy's relatively healthy state would continue through 2003.

Among those most optimistic were CEOs in the insurance and reinsurance sectors, reflecting the huge injection of new business since the September 2001 terrorist attacks on the World Trade Center.

Also optimistic are those in the financial services, professional services, and wholesale/retail areas.

Four out of nine CEOs in the wholesale/retail sectors predicted a moderate or strong increase in Bermuda's economic strength.

Less optimistic were those from the hospitality, construction and local/support sectors.

Other survey highlights included:

68 percent of companies expected a moderate or significant increase in revenue for 2003. CEOs most upbeat about the strength of Bermuda's economy were those anticipating growth in revenue.

These included insurance/reinsurance; professional and financial services; as well as wholesale/retail.

CEOs in the wholesale/retail sector were among the most optimist with seven out of nine predicting moderate growth in sales.

55 percent of CEOs expect moderate rise in net income; a further 5 percent anticipate a strong increase in 2003, with 14 percent braced for a decline. Most bullish are those in insurance and reinsurance.

Some 43 percent suggest they had no plans to hire more staff; 32 percent expect to boost the workforce moderately, while 23 percent anticipate trimming it. Four out of five CEOs in the booming insurance/reinsurance sector predicted no change to their head count.

46 percent of CEOs expected to increase moderately their capital expenditure - seen as a sign of economic strength. The telecommunications and financial services sector planned to invest in capital most significantly.

CEOs voiced great confidence in long-term prospects for their companies. The most confident were those in the financial services field.

The survey also spotlighted marketplace challenges.

Two-thirds of the CEOs surveyed said local regulatory issues such as labour relations and immigration presented the greatest challenges, in comparison to the 14 percent who identified overseas issues.

"This is interesting given the recent publicity over foreign regulators (such as the OECD, US Government) that are actively considering how to curtail businesses from taking advantage of tax friendly jurisdictions such as Bermuda."

It added: "The importance of this finding cannot be understated given its importance to Bermuda's long-term prosperity."

Just five percent picked out the prospect of war in Iraq and the threat of terrorism as challenges. Currency issues and the impact of the Internet were not major concerns either.

As for management challenges, CEOs listed customer loyalty and retention, reducing costs, and attracting new customers/expanding markets as the three external forces which will pose the greatest management challenges in 2003.

The top three concerns of exempt company CEOs, however, were listed as retaining skilled employees, developing and retaining potential leaders, and reducing costs.

And when asked about long-term prospects for their company, all the CEOs reported a strong degree of confidence. "Perhaps such a result is to be expected given the role of a CEO," said the survey. "It would be unusual for a CEO to continue to lead a company he or she expected to perform poorly in the long-term.

"The real value of this data will come in future years when we are able to track changes in confidence over a period of time and correlate the trends to other economic variables."