Why should we care about this survey?Not only is PwC a bit of a long-standing legend in the professional services industry, but they have also been running this survey since 1997. This means that they’ve clocked up quite a lot of experience when it comes to recording the thought processes of the world’s most influential business minds…
“CEOs’ revenue confidence can be considered a leading indicator of the direction of the global economy.” – PwCBut what’s the most useful aspect of recording CEO sentiment through the years? You write down their predictions, and according to PwC, they’ve found that these CEOs have become soothsayers in terms of predicting major geopolitical events:
“We found that CEO survey responses over the past decade reveal a strong correlation between chief executives’ expectations for their own organisations’ revenue growth and actual global GDP growth the following year.” – PwCBy listening to the predictions of experienced CEOs, business owners the world over can make changes that can could save their businesses, should any geopolitical storms be gathering on the horizon.
- Survey of 1,378 major chief executives
- Interviewed candidates in over 90 territories
- Conducted in September and October of 2018
- Discussed data, analytics and artificial intelligence
What are CEOs “thinking’ in 2019?
1. Pessimistic predictions dominateWhilst the survey from the previous year was defined by a general sense of optimism about global growth, this year’s surveys signifies something a little different.
“If CEOs’ confidence continues to be a leading indicator, global economic growth will slow down in 2019.” – PwCThis year, nearly 30% of CEOs are projecting a decline in global economic growth. What’s interesting is that only 5% of CEOs from last year made pessimistic predictions. But these pessimistic predictions are not generalised. These CEOs are making below-confident predictions in their own organisations’ revenue prospects. Across the board, they are cautioning for a general slowdown in company growth over the next 1-3 years.
2. Self-strengthening will be keyDue to world events beyond the control of even the highest flying CEOs, the common notion among those questioned is that business owners should batten down the hatches this year, and find ‘strength from within’.
“When asked to identify the most attractive foreign markets for investment, CEOs are narrowing their choices and expressing more uncertainty.” – PwC
But what does this mean?Political changes taking place across the globe, (including so-called populist and nationalist parties and sentiments coming to power and influence), mean that for CEOs “doing business” in their specific markets is coming more complicated. Logistics are becoming less easy to navigate as the masses turn against globalist messages of internationalism, and state systems turn inward, cue Brexit. The common concerns CEOs are facing include worries about overregulation, policy uncertainty, the availability of skilled staff, and trade conflicts.
3. The data-to-knowledge gap enduresAccording to the findings, CEOs are still experiencing a knowledge gap where “big data reading” is concerned.
“Despite billions of dollars of investment and priority positioning on the C-suite agenda — the gap between the information CEOs need and what they get has not closed in the past ten years.” – PwCThere are still not enough people in the job economy who have the ability to “extract value from big data”, say the CEOs questioned in the survey. Furthermore, whilst artificial intelligence is now a common buzzword amongst almost many CEOs and their staff, there is still a lack of knowledge about how to make the most of this new technology.
4. The US is the most pessimistic location for CEOs in 2019Optimism among North America’s CEOs dropped the most sharply this year, with optimism rates snowballing from 63% last year to only 37%. This mirrors CEO opinions regarding a slowdown in global growth from only 3% to 28% of respondents saying it is a concern this year.
“Most major economic models have adjusted their 2019 forecasts downward. International trade tensions, political upset and uncertainty, and stricter monetary and fiscal policy have a part to play.” – PwC
Asia-Pacific also reports a climate of “less confidence”CEOs in this region, despite the fact that PwC claims it’s replaced the US as the most economically confident region on earth, they are also less confident than they were.
The rate of CEOs expecting improved economic growth has fallen from 60% to just 50% for this year.
Populism rises as globalism wanesFrom the US to the European mainland, it’s no secret that we’ve witnessed the rise of politicians that are peddling a nationalist and eco-politically protectionist stance within their respective countries. [article id=”130610″ title=”Davos 2019: The last example of globalism in action?”] This goes hand-in-hand with a shift away from globalist tendencies, such as encouraging cooperation between states on issues such as trade and climate change. This is a trend that has been recognised by the World Economic Forum, say the findings. Whatever your political standing, a worldwide trend toward nation-state unilateralism and global fragmentation won’t do much to help internationally operating CEOs sell their goods and services with ease… Interested in the findings? Read the full report here.
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