Most CEOs fear fall in global economic growth

Some 73 per cent of chief executive officers (CEOs) believe global economic growth will decline over the next 12 months, according to the PwC's annual global CEO survey released yesterday.

The bleak outlook is the most pessimistic CEOs have been regarding global economic growth since the PwC began the survey 12 years ago.

It is a significant departure from the optimistic outlooks of 2021 and 2022, when more than three-quarters thought economic growth would improve, the global advisory and tax services provider said.

The PwC survey polled 4,410 chief executives in 105 countries and territories in October and November 2022, as per a press release.

The survey found that 40 per cent of CEOs think their organisations will not be economically viable in a decade if they continue on their current path.

The pattern is consistent across a range of sectors, including telecommunications, manufacturing healthcare and technology.

The survey found that 40 per cent of CEOs think their organisations will not be economically viable in a decade if they continue on their current path

As per the survey, the confidence CEOs have in their own company's growth prospects declined 26 per cent since last year.

It is the biggest drop since the 2008-09 financial crisis, when CEO confidence in their own company prospects slumped 58 per cent.

Meanwhile, inflation, macroeconomic volatility and geopolitical conflict are major concerns for CEOs.

The PwC then said while cyber and health risks were the top concerns a year ago, the impact of the economic downturn is top-of-mind for CEOs this year.

Some 40 per cent of top executives think their companies are being exposed to inflation and nearly one-third are concerned about macroeconomic volatility in the next 12 months.

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, the PwC said in its statement.

The survey also found that almost half of respondents that are exposed to geopolitical conflict are integrating a wider range of disruptions into scenario planning and corporate operating models.

As such, they are either increasing investments in cybersecurity or data privacy, adjusting supply chains, re-evaluating market presence or expanding into new markets, or diversifying their product or service offerings, it said.

And in response to the current economic climate, chief executives are looking to cut costs and spur revenue growth.

As a result, 52 per cent of CEOs reported reducing operating costs while 51 per cent raised prices and 48 per cent diversified their product and service offerings.

However, more than half -- 60 per cent -- say they do not plan to reduce the size of their workforce in the next 12 months.

"A vast majority -- 80 per cent -- indicate they do not plan to reduce staff remuneration either in order to retain talent and mitigate workforce attrition rates," said Bob Moritz, chairman of PwC Global.

"A volatile economy, decades-high inflation, and geopolitical conflict have contributed to a level of CEO pessimism not seen in over a decade," he added.

Moritz then said CEOs are consequently re-evaluating their operating models and cutting costs but despite these pressures, they are continuing to put their people front and centre as they look to retain talent.