What global CEOs think

More than 1,300 CEOs interviewed in PwC’s 18th Annual Global CEO Survey found that the global CEOs are less optimistic about global growth prospects than a year ago, with 37 percent of CEOs thinking global economic growth will improve in 2015. This is down from 44 percent last year.

Significantly, 17 percent of CEOs believe global economic growth will decline, more than twice as many as a year ago (7 percent). The remaining 44 percent expect economic conditions to remain steady.

PWC says, in a statement, that regionally, the results show wide variations.

CEOs in Asia Pacific are the most optimistic about the global economy with 45 percent anticipating improvement, followed by the Middle East (44 percent) and North America (37 percent). On the other hand, only 16 percent of CEOs in Central and Eastern Europe expect economic improvement. CEOs in emerging economies like India (59 percent), China (46 percent) and Mexico (42 percent) are more optimistic about the economy than those in developed economies like the US (29 percent) and Germany (33 percent).

Revenue growth
Despite the overall declining outlook for the global economy, CEOs remain confident about prospects for their own company; 39 percent worldwide said they are ‘very confident’ their company’s revenues will grow in the next 12 months. That’s the same as last year; though up slightly from 36 percent in 2013.

CEOs in the Asia Pacific region (45 percent) are most confident of revenue growth, about the same as last year. The Middle East is still one of the most optimistic regions with 44 percent of CEOs very confident of revenue growth, although this is down markedly from last year’s 69 percent.

CEO confidence in growth is higher in North America, rising to 43 percent from 33 percent. CEOs in Western Europe (31 percent) and Central and Eastern Europe (30 percent) are least optimistic about their company’s growth prospects.

PWC says that looking country by country, India’s CEOs top the list, with 62 percent very confident in their short-term growth prospects.

Other leading countries include Mexico (50 percent), the US (46 percent), Australia (43 percent) the UK and South Africa
(39 percent), China (36 percent), Germany (35 percent) and Brazil (30 percent).

Among the least confident countries are France (23 percent), Venezuela (22 percent), Italy (20 percent), Argentina (17 percent) and, at the bottom of the list, Russia, with only 16 percent of CEOs very confident of revenue growth for 2015. This is down from 53 percent last year when Russia’s CEOs were the most confident in the world.

Commenting on the survey results, Dennis M. Nally, chairman of PricewaterhouseCoopers International, says: “The world is facing significant challenges: economically, politically and socially. CEOs overall remain cautious in their near-term outlook for the worldwide economy, as well as for growth prospects for their own companies. While some mature markets like the US appear to be rebounding, others like the Eurozone continue to struggle. And while some emerging economies continue to expand rapidly, others are slowing. Finding the right strategic balance to sustain growth in this changing marketplace remains a challenge.

“CEO confidence is down notably in oil-producing nations around the world as a result of plummeting crude oil prices. Russia CEOs, for example, were the most confident in last year’s survey, but are the least confident this year. Confidence also slipped among CEOs in the Middle East, Venezuela, and Nigeria.”

US most important market for growth
CEOs rank the US as their most important market for growth over the next 12 months, placing it ahead of China for the first time since the question was first asked five years ago.  Overall, 38 percent of CEOs say the US is among their top-three overseas growth markets, compared with 34 percent for China, 19 percent for Germany, 11 percent for the UK and 10  percent for Brazil.

PWC says that CEOs say they will undertake a number of business strategies to strengthen their companies in the coming 12 months. Overall:

  • 71 percent say they will cut costs.
  • 51 percent will form strategic alliances or joint ventures.
  • 31 percent will outsource a business process or function.
  • 29 percent will complete a domestic M&A (up from 23 percent last year).

What worries CEOs the most?
PWC says that over-regulation again tops the list of concerns, named by 78 percent of CEOs worldwide. This is up six points from last year and is now at the highest level ever seen in the survey. Countries where concern about over-regulation is particularly high include Argentina (98 percent), Venezuela (96 percent), the US (90 percent), Germany (90 percent), the UK (87 percent), and China (85 percent). 

Other top concerns cited by CEOs are:

  • Availability of key skills (73 percent).
  • Fiscal deficits and debt burdens (72 percent).
  • Geopolitical uncertainty (72 percent).
  • Increasing taxes (70 percent).
  • Cyber threats and the lack of data security (61 percent) up from 48 percent last year.
  • Social instability (60 percent).
  • Shifting consumer patterns (60 percent).
  • The speed of technological change (58 percent). 
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