CEOs’ optimism about global economic factors is at its highest level in a decade: 77% of the 4,446 CEOs surveyed expect conditions to improve, while only 15% expect the economy to deteriorate.
This is acc PwC’s 25th Annual Global CEO Survey which surveyed CEOs in 89 countries and territories between October and November 2021.
Despite adverse market conditions such as rising inflation, supply chain disruptions and unrelenting hurricanes from Covid-19, the report reveals that CEOs’ optimism for 2022 is actually a tad higher than the 76% optimism a year ago and a full 54 points higher than 2020 , when more than half of CEOs predicted a slowing economy.
“As the ongoing pandemic and the emergence of new variants cast a shadow over the year, the high level of CEO optimism we observed speaks to the strength and resilience of the global economy and CEOs’ ability to manage uncertainty,” says the global Chairman of PwC Bob Moritz.
“Nothing is ‘normal’ in the world we work in, but we get used to it,” he adds.
“We’re seeing disparities in confidence across countries and there’s no shortage of challenges to overcome, but it’s encouraging that the CEOs we spoke to are overall positive about 2022.”
Views vary geographically
While CEOs are generally optimistic about economic growth in 2022, this view varies across countries and territories.
Among South African CEOs surveyed, 37% say they are “very confident” about their company’s prospects for revenue growth over the next 12 months, while in Africa 85% of CEOs believe global economic growth will improve , and 8% expect it to drop.
“The Covid-19 pandemic has prompted many organizations in Africa to rethink the way they operate, how they build trust and achieve sustainable results,” said Dion Shango, Territorial Senior Partner at PwC Africa.
“Optimism about growth prospects in Africa points to greater resilience; Africa’s CEOs are running their organizations more effectively, navigating more complex scenarios, collaborating with a broader set of stakeholders and acting boldly in the face of uncertainty. They are optimistic – and realistic – about the challenges and opportunities ahead.”
Most versus least optimistic
Among the largest territories, optimism is highest in India, where 94% of CEOs expect global growth in the coming year.
The same perspective is seen in countries like Japan (up 16 points to 83%, from 67% last year), Great Britain (up five points to 82%), Italy (reaches 89%, 18 points more than a year ago). , and France (up 25 points to 85%).
However, the US does not share this optimism – its level fell by 18 points to 70%.
The trend is the same for Brazil (down seven points to 77%), China (down nine points to 62%) and Germany (down four points to 76%). According to PwC, the trend can be attributed to inflation and supply chain constraints, which have become a bigger problem.
While US CEOs may be less hopeful about the global economy, they are comparatively confident about their own companies’ growth prospects, with 40% saying they are extremely confident of achieving revenue growth in 2022. CEOs in India are also similarly confident.
According to the report, cyber and health risks are among the top global potential threats that could impact the overall performance of organizations – 59% of CEOs in the financial services sector cite cyberattacks as a top threat, while manufacturing (40%) and consumer (39%) CEOs showed less concern despite the high volume of attacks in these sectors.
In the hospitality and leisure sector, 75% of CEOs say they are concerned about the impact of health risks on their business. In Africa, health risks and macroeconomic volatility are among the top threats, followed by cyber risks.
According to Shango, CEOs in Africa are understandably concerned about health risks outside of Covid-19, including diseases like malaria, tuberculosis, HIV/AIDS and others that have been a challenge for many years.
In addition, 43% of CEOs (South Africa: 37%) are either very or extremely concerned about the potential impact of inflation, GDP volatility and labor market issues in the coming year.
Another key concern is the ability to attract and retain talent – 69% of CEOs concerned about the risks of social inequality cite this as an impact, as do 62% of CEOs concerned about health risks.
“As CEOs look to the next 12 months, they are understandably concerned about potential threats to near-term performance that disruptions could pose, including macroeconomic volatility, cyber and health risks,” adds Moritz.
“While threats such as climate change and social inequality are further down the list, it is important not to lose focus on these longer-term issues as they will define the type of world we live in and be passed on to the next generation. ”
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Palesa Mofokeng is an intern at Moneyweb.