73% of CEOs believe global growth will fall this year: PwC survey

Highlights:

PwC Global CEO Survey: Threats, challenges ahead

• Inflation (40%), macroeconomic volatility (31%) and geopolitical conflict (25%)
• Changing customer demands, regulation, skills shortages and tech disruption 60%
• CEOs do not plan job cuts, 80% don't plan pay cuts

Nearly three quarters (73%) of chief executive officers (CEOs) of global companies surveyed believe the world economic growth will decline over the next 12 months, while 40% of top executives think their organisations will not be economically viable in a decade, according to the PwC's 26th Annual Global CEO Survey that revealed the gloomy business outlook.

The findings of the PricewaterhouseCoopers (PwC) survey, which polled 4,410 CEOs in 105 countries and territories in October and November 2022, were released yesterday in New York.

Nearly 40 CEOs from Bangladesh were among them, according to the PwC Bangladesh office.

Inflation, macroeconomic volatility and geopolitical conflict top CEOs' concerns worldwide, prompting them to look to spur revenue growth by reducing operating costs, raising prices and diversifying product and service offerings. 

However, job cuts are not on their minds for at least a year.

More than half – 60% – say they do not plan to reduce the size of their workforce in the next 12 months.

A vast majority – 80% – indicate they do not plan to reduce staff remuneration to retain talent and mitigate workforce attrition rates.

The war in Ukraine and growing concern about geopolitical flashpoints in other parts of the world have caused CEOs to rethink aspects of their business models, either by increasing investments in cybersecurity or data privacy, adjusting supply chains, re-evaluating market presence, expanding into new markets, or diversifying their product/service offering.

The bleak CEO outlook is the most pessimistic CEOs have been regarding global economic growth since the leading international accounting and professional services firm PwC started the survey a decade back.

It also marks a significant departure from the optimistic outlooks of 2021 and 2022, when more than three-quarters (76% and 77%) thought economic growth would improve, according to a release of the firm.

Business executives in France, Germany and the UK are less optimistic about domestic growth than global growth, compared to those in the US, Brazil, India and China.

The gloomy outlook is consistent across a range of sectors, including telecommunications (46%), manufacturing (43%), healthcare (42%) and technology (41%).

CEO confidence in their company's growth prospects also declined dramatically since last year (-26%), the most significant drop since the 2008-2009 financial crisis when a 58% decline was recorded.

CEOs are also seeing multiple direct challenges to profitability within their industries over the next 10 years. More than half believe changing customer demand/preferences will impact profitability, followed by changes in regulation, labour/skills shortages, and technology disruptions.

Bob Moritz, global chairman, PwC, said, "A volatile economy, decades-high inflation, and geopolitical conflict have contributed to a level of CEO pessimism not seen in over a decade."

CEOs globally are consequently re-evaluating their operating models and cutting costs. Yet, despite these pressures, they continue to put their people front and centre as they look to retain talent in the wake of the "Great Resignation", the PwC global chief pointed out.

CEOs see climate risk impacting their cost profiles, followed by supply chains and physical assets.

Recognising the impact climate change will have on business and society over the long-term, a majority of CEOs have already implemented – or are in the process of implementing – initiatives to reduce their companies' emissions, in addition to innovating new, climate-friendly products and processes, the survey found.