I’ve just finished digesting the latest PwC annual survey of CEOs and, as always, it makes for an interesting read.
Now in its 21st year, the survey has become a well-respected barometer of mood at an executive level. This year, feelings seem to be in a state of flux.
The outcomes were released ahead of the official opening of the World Economic Forum meeting in Davos, Switzerland. Apparently, the global consulting firm PwC surveyed almost 1,300 CEOs located in 85 counties.
Undertaken between August and November 2017, the survey aims to inform and stimulate “the debate on how businesses are facing today’s challenges.” A debate, it most certainly has sparked.
On the one hand, the data returned paints a very rosy picture of an optimistic outlook in business. On the other, there’s more trepidation than I’ve seen in a long time. This is especially noticeable around long-term forecasts and global threats encroaching on industry.
Although the results vary significantly between CEOs based in different countries, there are overarching themes. For those that haven’t had time to read the full survey, here are the salient points:
The majority of CEOs believe global economic growth will improve this year (57%, a steep rise from 29% in 2017). These are very encouraging figures.
According to the report:
“PwC’s 21st CEO Survey reveals surprising faith and optimism among chief executives in the economic and business environment worldwide, at least over the next 12 months.”
Bob Moritz, Global Chairman at PwC, echoed this, stating “CEOs’ optimism in the global economy is driven by the economic indicators being so strong.”
The economic-growth result is the largest-ever increase since PwC began surveying views on global development. Indeed, 88% of UK CEOs said they were “optimistic” about the growth prospects of their business in 2018; 42% of CEOs globally said they are very confident about it (compared to 38% last year).
It is this assurance that is fuelling jobs growth, which is excellent news. 54% of respondents said they plan to increase their staffing in 2018, compared to 52% in 2017. Healthcare (71%), Technology (70%), Business Services (67%), Communications (60%), and Hospitality and Leisure (59%) were among the sectors with the greatest requirement for new staff.
In spite of the upbeat news about global economic growth over the next year, CEOs were far more cautious about the mid-term outlook.
This might seem at odds. However, the swiftness of political, economic, and technological change is making it far more difficult for CEOs to make a judgement beyond the next 12 months or so. The majority of firms surveyed believe Brexit to be “the most serious threat to the UK’s position as a leading global financial centre.”
“The higher level of concern is being driven by larger societal and geopolitical shifts rather than the dynamics of business leaders’ own markets,” comments Moritz. “It’s clear their mid to long-term confidence in revenue growth is tempered by threats the business world is not used to tackling directly itself.”
He went on:
“The higher levels of CEO concern about broader societal threats underlines how companies are navigating an increasingly fractured world. CEOs across every region and country that we spoke to recognise that the old ways of measuring growth and profit won’t work alone for the future.”
Heightened levels of anxiety
CEOs worldwide show heightened anxiety regarding the economic and societal threats facing their businesses. The top 5 perceived risks in 2018 are over-regulation, terrorism, geo-political uncertainty, cyber threats, and availability of key skills.
Extremism has risen into the top 10 risks to business as seen by CEOs. Likewise, 22% of CEOs are extremely worried about the availability of critical digital skills in the workforce, 27% in their industry and 23% at leadership level.
Investments in working environments, learning and development programmes, and partnering with other providers are top strategies to help attract new digital talent.
Shifting growth prospects
International markets are shifting rapidly. India has now overtaken Japan as the fifth most attractive market in 2018 according to CEOs (after the UK, Germany, China and U.S). However, the U.S. has widened the lead as the top market for growth prospect (say 46% of correspondents, up from 43% in 2017).
“The Trump administration’s pro-business agenda of deep corporate tax cuts and rolled-back regulation has helped accelerate one of the longest stock market booms in history, while driving corporate confidence to new highs and jobless rates to new lows,” PwC says in its report.
As a result of the findings, PwC suggests that CEOs now need to make it their business to influence new measures in industry, foster a place for technology, push education, and commit to real organisational purpose.
Although much is yet to unfold, what the survey tells us is that social instability is an overriding concern worldwide. Global events are being felt on a local stage.
Here in the UK, the EEF National Manufacturing Conference in London in February is a case in point. Workshop topics such as Reducing Energy Costs, Futureproofing Your Workforce, Post-Brexit Trading, and Cyber Security, couldn’t be more apt!
Given the daily shift of the global economy, I’m curious how the results may have differed even now, only three months after the survey closed.
What are the most significant concerns that you have about the future of your industry?
How are you and your organisation planning to tackle these challenges?
We’d love to hear your thoughts…