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CEO pessimism over global growth reaches record high: PwC
21 Jan '20
3 min read
Pic: Shutterstock
Chief executive officers (CEOs) are highly pessimistic about the global economy, with 53 per cent predicting a decline in growth rate in 2020. This is up from 29 per cent in 2019 and 5 per cent in 2018—the highest since PwC started such a survey in 2012. The number of CEOs foreseeing a growth rate rise dropped from 42 per cent in 2019 to 22 per cent in 2020.
CEO pessimism over global economic growth is particularly significant in North America, Western Europe and the Middle East, with 63 per cent, 59 per cent and 57 per cent of CEOs from those regions predicting lower global growth in the year ahead.
PwC's 23rd survey of around 1,600 CEOs from 83 countries was recently unveiled at the World Economic Forum annual meeting in Davos, Switzerland, the company said on its website.
"Given the lingering uncertainty over trade tensions, geopolitical issues and the lack of agreement on how to deal with climate change, the drop in confidence in economic growth is not surprising – even if the scale of the change in mood is," said Bob Moritz, Chairman, of the PwC Network.
"These challenges facing the global economy are not new – however the scale of them and the speed at which some of them are escalating is new, the key issue for leaders gathering in Davos is: how are we going to come together to tackle them," he added.
CEOs are also not so positive about their own companies' prospects for the year ahead, with only 27 per cent of them saying they are ‘very confident’ of their own organisation's growth over the next 12 months—the lowest level seen since 2009 and down from 35 per cent last year.
While confidence levels are generally down across the world, there is a wide variation from country to country, with China and India showing the highest levels of confidence among major economies at 45 per cent and 40 per cent respectively, the United States at 36 per cent, Canada at 27 per cent, the United Kingdom at 26 per cent, Germany at 20 per cent, France 18 per cent, and Japan having the least optimistic CEOs with only 11 per cent of CEOs very confident of growing revenues in 2020.
Overall the United States just retains its lead as the top market CEOs look forward to for growth over the next 12 months at 30 per cent, a percentage point ahead of China at 29 per cent. However, ongoing trade conflicts and political tensions have seriously dented the attractiveness of the United States for Chinese CEOs.
In 2018, 59 per cent of Chinese CEOs selected the United States as one of their top three growth markets, while in 2020 this has dropped dramatically to just 11 per cent. The United States’ loss has been Australia's gain, with 45 per cent of Chinese CEOs now looking to Australia as a top three key growth market compared with only 9 per cent two years ago.
The other countries making the top five for growth are unchanged from last year – Germany (13 per cent), India (9 per cent) and the United Kingdom (9 per cent).
CEO pessimism over global economic growth is particularly significant in North America, Western Europe and the Middle East, with 63 per cent, 59 per cent and 57 per cent of CEOs from those regions predicting lower global growth in the year ahead.
PwC's 23rd survey of around 1,600 CEOs from 83 countries was recently unveiled at the World Economic Forum annual meeting in Davos, Switzerland, the company said on its website.
"Given the lingering uncertainty over trade tensions, geopolitical issues and the lack of agreement on how to deal with climate change, the drop in confidence in economic growth is not surprising – even if the scale of the change in mood is," said Bob Moritz, Chairman, of the PwC Network.
"These challenges facing the global economy are not new – however the scale of them and the speed at which some of them are escalating is new, the key issue for leaders gathering in Davos is: how are we going to come together to tackle them," he added.
CEOs are also not so positive about their own companies' prospects for the year ahead, with only 27 per cent of them saying they are ‘very confident’ of their own organisation's growth over the next 12 months—the lowest level seen since 2009 and down from 35 per cent last year.
While confidence levels are generally down across the world, there is a wide variation from country to country, with China and India showing the highest levels of confidence among major economies at 45 per cent and 40 per cent respectively, the United States at 36 per cent, Canada at 27 per cent, the United Kingdom at 26 per cent, Germany at 20 per cent, France 18 per cent, and Japan having the least optimistic CEOs with only 11 per cent of CEOs very confident of growing revenues in 2020.
Overall the United States just retains its lead as the top market CEOs look forward to for growth over the next 12 months at 30 per cent, a percentage point ahead of China at 29 per cent. However, ongoing trade conflicts and political tensions have seriously dented the attractiveness of the United States for Chinese CEOs.
In 2018, 59 per cent of Chinese CEOs selected the United States as one of their top three growth markets, while in 2020 this has dropped dramatically to just 11 per cent. The United States’ loss has been Australia's gain, with 45 per cent of Chinese CEOs now looking to Australia as a top three key growth market compared with only 9 per cent two years ago.
The other countries making the top five for growth are unchanged from last year – Germany (13 per cent), India (9 per cent) and the United Kingdom (9 per cent).
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