CEO confidence in growth dips dramatically

Trade conflicts, policy uncertainty, geopolitical issues and skills gap impacting strength of global economy

According to the key findings of PwC’s 22nd annual survey of more than 1,300 CEOs around the world, launched at the World Economic Forum Annual Meeting in Davos, nearly 30% of business leaders believe that global economic growth will decline in the next 12 months, approximately six times the level of 5% last year – a record jump in pessimism. This is in vivid contrast to last year’s record jump, 29% to 57%, in optimism about global economic growth prospects.

Although, all is not doom and gloom: 42% still see an improved economic outlook, though this is down significantly from a high of 57% in 2018. Overall, CEOs’ views on global economic growth are more polarised this year but trending downward.  

The drop in CEO optimism has also impacted growth plans beyond their own country borders. The US narrowly retains its position as the top market for growth at 27%, down significantly from 46% in 2018. The second most attractive market, China, also saw its popularity fall to 24%, down from 33% in 2018. Overall, India is the rising star on the list this year, recently surpassing China as the fastest growing large economy.

“CEOs’ views of the global economy mirror the major economic outlooks, which are adjusting their forecasts downward in 2019,” said Bob Moritz, Global Chairman, PwC. “With the rise of trade tension and protectionism it stands to reason that confidence is waning.”

Confidence in short-term revenue growth has fallen sharply

The unease about global economic growth is also lowering CEOs’ confidence about their own companies’ outlook in the short term.  Thirty-five percent of CEOs said they are ‘very confident’ in their own organisation’s growth prospects over the next 12 months, down from 42% last year. To drive revenue this year, CEOs plan to rely primarily on operational efficiencies at 77% and organic growth at 71%.

Threats to growth

As indicators predict an imminent global economic slowdown, CEOs have turned their focus to navigating the surge in populism in the markets where they operate. Trade[1] conflicts, policy uncertainty, and protectionism have replaced terrorism, climate change, and increasing tax burden in the top ten list of threats to growth.

Data & Analytics and Artificial Intelligence

This year’s survey took a deep dive into Data & Analytics and Artificial Intelligence (AI), two key areas on leaders’ radar, to get CEOs’ insights on the challenges and opportunities. It was found that CEOs continue to face issues with their own data capabilities, resulting in a significant information gap. Despite billions of dollars of investments made in IT infrastructure over this time period, CEOs report still not receiving comprehensive data needed to make key decisions about the long-term success and durability of their business. At the same time, eighty-five percent of CEOs agree that AI will dramatically change their business over the next five years. Nearly two-thirds view it as something that will have a larger impact than the internet.

Τhe views of CEOs in Cyprus

In the context of the global CEO survey, PwC Cyprus carried out for the 8th consecutive year, a local study which captures the views of more than 90 CEOs in Cyprus. The results of the local survey will be presented during a special event that will be held in late March. 

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Konstantina Logotheti

Head of Marketing and Communications, PwC Cyprus

Tel: +357-22555108

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