Chief executives are increasingly insecure
about the future with almost three in ten predicting a decline in global
economic growth this year, a 436 per cent increase on 2018, a new report has
But while there are more chief executives who believe the global economy’s rate of growth will continue to rise, the 22nd Annual Global CEO Survey, conducted by professional services firm PwC, shows worrying signs of pessimism.
The survey, which questioned 1,378 CEOs across more than 90 territories, found that just 35 per cent of chief executives feel ‘very confident’ in their own company’s prospects over the next 12 months while just 36 per cent are ‘very confident’ over the next three years.
PwC said that the lines had ‘essentially converged’ at the lowest levels of ‘very confident’ reported since 2009, which it claims is a leading indicator of global economic growth. Delving into the survey’s previous findings has revealed a strong correlation between chief executives’ expectations for their own organisations’ revenue growth and actual global GDP growth the following year.
While ‘over-regulation’ remains the biggest risk that concerns chief executives, this year they are also increasingly fretting about policy uncertainty and the availability of key skills. More than half said that a lack of skills affected their ability to innovate effectively, thus harming their growth prospects. In 2018, over-regulation, terrorism and geopolitical uncertainty were viewed as the top three risks.
While businesses are now overwhelmed by data, the survey found that there remains an inability to corral it into useable and actionable intelligence. Fewer than one in three chief executives consider the information they receive on ‘critical’ or ‘important’ matters as sufficiently comprehensive. This is particularly true when it comes to data about customer needs: 95 per cent of business leaders consider this to be critically important while only 15 per cent found it comprehensive. More than half attribute this to a ‘lack of analytical talent’.
Artificial Intelligence also remains hot on the chief executive agenda; 85 per cent believe it will change the way they do business over the next five years. However, nearly a quarter plan to do nothing with the technology ‘at the moment’ while fewer than one in ten have implemented it ‘on a wide basis’.
Bob Moritz, global chairman of PwC, said: ‘The prevailing sentiment this year is one of caution in the face of increasing uncertainty… CEOs are less bothered by the broad, existential threats that figured prominently in the rankings last year, like terrorism and climate change, and are more ‘extremely concerned’ about factors that affect the ease of doing business in the markets where they operate and those that impact their overall confidence and willingness to invest and/or take risk. They are increasingly worried about trade disputes and the unpredictable geopolitical landscape.’
The report concludes that chief executives are increasingly focused on opportunities in their home markets, and at fixing the issues – such as the information gap and skills shortages – that affect their own organisations.