CFA Society Singapore
SINGAPORE (Jan 23): A record-breaking 57% of chief executive officers (CEOs) believe global economic growth will improve in the next 12 months, according to the latest data from PricewaterhouseCoopers’ 21st survey of almost 1,300 CEOs around the world.
In a media release on Tuesday, the professional services firm highlights that the latest figure is almost double that of last year (29%), and the largest-ever increase since PwC began surveying business leaders about global growth in 2012.
Based on PwC’s observations, the optimism in global growth has particularly doubled among CEOs in the US (59%) after a period of uncertainty surrounding the election (24% in 2017), while Brazil saw a large increase in the proportion of CEOs optimistic of global growth improvement based on its 38% increase to 80%.
This phenomenon appears to be feeding into CEOs’ confidence about their own companies’ outlook, adds the firm, with 42% of CEOs stating they are “very confident” in their organisation’s growth prospects over the next 12 months compared to 38% the year before.
This year, the US reinforced its lead on China in garnering the most confidence among global CEOs with 46% of CEOs voting it the top market for growth in the next 12 months, compared to 33% on China.
Germany remains in third place, at 20%, followed by 15% for the UK at No. 4.
PwC also notes that confidence in short-term revenue growth is feeding into jobs growth as well, with 54% of CEOs planning to increase their headcount this year compared to 52% a year ago.
Healthcare (71%), Technology (70%), Business Services (67%) Communications (60%) and Hospitality and Leisure (59%) are amongst the sectors with the highest demand for new recruits.
Despite the general optimism in global economic growth for 2018, PwC says that anxiety is rising on a much broader range of business, social and economic threats.
This is because a significant 40% of CEOs surveyed say they are ‘”extremely concerned” about geopolitical uncertainty (40%), cyber threats (40%), terrorism (41%), availability of key skills (38%) and populism (35%) – all of which outpace familiar concerns about business growth prospects such as exchange rate volatility (29%) and changing consumer behaviour (26%).
Bob Moritz, Global Chairman, PwC, attributes the bullish sentiment in global economic growth to strong economic indicators as reflected in booming stock markets and optimistic GDP forecasts.
“Even with high levels of global growth confidence, business leaders want and need safe harbours for investment to secure short-term growth. Access to consumers, skills, finance and a supportive regulatory environment are reinforcing leading markets’ positions, for business leaders to achieve their short-term growth targets,” says Moritz.
Looking ahead, Moritz notes an “increasingly fractured world” which companies will need to navigate through as a result of broader societal threats, and foresees more work developing and defining metrics that capture and communicate an organisation’s purpose in a way that is relevant to businesses’ stakeholders in the coming years.
“The higher level of concern is being driven by larger societal and geopolitical shifts rather than the dynamics of business leaders’ own markets. 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 adds.