CEOs have high hopes despite concerns


CEOs are optimistic about economic growth this year, but they are less confident about their own companies’ performance.

The majority (57%) of about 1,300 CEOs surveyed by PwC said they expect global economic growth to improve over the next 12 months. At double the levels of optimism from last year, this is the highest ever jump to a peak figure since the question was first asked in 2012.

Additionally, these high optimism levels hold across regions, ranging from 41% in Africa to 65% in Latin America. This is due to the healthy signs of recovery the global economy has seen in 2017, according to PwC’s analysis. The euro zone is on the path to recovery. Global commodity prices seem to have steadied at a reasonable level. Russia and Brazil are back on a track for modest growth.

China also has adjusted to its flatter trajectory, while the UK has not seen a major slowdown due to Brexit approaching, the survey notes. The US, meanwhile, is seeing one of the largest stock market booms in history, aided by the current administration’s corporate tax cuts and decrease in regulations.

CEOs are more cautious about 12-month growth for their own organisations, except in North America, PwC’s research has found. At 53%, North America’s figure is a considerable jump from last year’s 39%, and higher than in other regions, where they vary between 26% in Africa to 45% in Latin America. Organic growth (94%), new mergers and acquisitions (61%), and cost reduction (59%) are identified as key growth drivers by North American CEOs.

Also, there is a dip in positivity for a three-year outlook for businesses across all regions. For the first time since 2014, the number of respondents who said they are somewhat confident rose to 46%. The number of respondents who said they were very confident dropped to 45%, the lowest level since 2009.

Economic optimism and organisational optimism were high amongst US accountants and finance professionals in the second quarter of 2018, according to the most recent outlook survey conducted by the Association of International Certified Professional Accountants. Both scored higher compared to the second quarter 2017, but slightly lower than in the first quarter 2018.

Corner office concerns

CEO concerns differ somewhat according to the mix of threats each region experiences. CEOs worry most about cyber threats in North America, populism in Western Europe and Latin America, availability of key skills in Asia Pacific, and social instability in Africa.

Overall, these top ten concerns worry CEOs most in 2018:

  1. Over-regulation (42%, same as 2017)
  2. Terrorism (41%, up from 20% in 2017)
  3. Geopolitical uncertainty (40%, up from 31% in 2017)
  4. Cyber threats (40%, up from 24% in 2017)
  5. Availability of key skills (38%, up from 31% in 2017)
  6. Speed of technological change (38%, up from 29% in 2017)
  7. Increasing tax burden (36%, up from 29% in 2017)
  8. Populism (35%)
  9. Climate change and environmental damage (31%)
  10. Exchange rate volatility (29%, down from 31% in 2017)

4 tactics to tackle the concerns

The survey found that while the internet is bringing down barriers, and companies are building global systems with ease, this is not doing much to bridge the wealth gap or deal with pressing global concerns such as climate change.

Towards this, PwC Global Chairman Bob Moritz advised companies in the report to look at progress not just in monetary terms, but also include parameters such as social progress and quality of life. CEOs should work with their teams to leverage technology for the benefit of society, he added. Companies should also co-operate with governments and educational institutions to build a future-ready workforce.

Finally, to meet growing societal and investor expectations, CEOs should lead their teams in defining a business purpose that encompasses social and environmental good, he said, according to the report. Crucially, this purpose should be encoded into how the organisation lives and behaves, and employees measured on their commitment to it.

Shilpa Pai Mizar is a freelance writer based in the UK. To comment on this article or to suggest an idea for another article, contact Sabine Vollmer, an FM magazine senior editor, at