Home ›› 15 Mar 2021 ›› World Biz
A record number of chief executives officers – about 76% - believe that global economic growth will improve in 2021, findings of PwC’s 24th Annual Global CEO Survey showed, marking a significant rebound in the findings from the agency’s 2019 survey where 22% of the CEOs expected growth.
“CEOs’ optimism also reflects momentum in vaccine development and rollout in parts of the world. We are by no means out of the woods, but CEOs see a path forward—for the global economy, and for their own organisations,” the survey said.
About 36% of CEOs said they were very confident about their revenue growth prospects for the next year, and 47% said they were very confident looking ahead three years.
PwC’s survey estimates global growth to rise as much as 5%, just slightly lower than recent IMF projections that the global economy will grow 5.5% in 2021 and in line with separate PwC analysis suggesting it will return to its pre-pandemic size by the fourth quarter of 2021 or early 2022.
While CEO confidence has rebounded, concerns remain in industries where the effect of the COvid-19 pandemic induced lockdown and restrictions has been most pronounced, altering the conditions of work, life, travel and shopping.
The hospitality, leisure, transportation and logistics sectors are among those with the lowest reported confidence levels, while CEOs in technology are more confident than their peers in every other industry, a natural by-product of the pandemic’s digital acceleration.
Despite their confidence, CEOs are aware of threats in the external environment - pandemics and other health crises are the number one threat on this year’s list, with 52% of CEOs stating they are ‘extremely concerned’, the survey highlighted.
Cyber threats moved up the threat list for 2021, becoming No 2 concern for CEOs, followed by over-regulation and tax policy uncertainty.
Cyber threat is the top concern for CEOs in the asset and wealth management, insurance, private equity, banking and capital markets, and technology sectors.
The increase in CEOs’ concern about cyber threats and misinformation coincides with the rapid acceleration of many companies’ digital transformation. Nearly half of CEOs plan increases of 10% or more in their long-term investment in digital transformation.
A growing number of CEOs are seeking to boost their organisation’s competitiveness through digital investments in the workforce; 36% aim to focus on productivity through technology and automation.
At the same time, that tax policy uncertainty made a notable rise on the list of threats. CEOs said they were watching debts accumulate as governments intervene with stimulus packages, and realise that the public will expect business to pay its fair share.
“Anxiety and accountability for how much companies pay in taxes, and where they pay them, appear to be rising in tandem,” the survey said.
Among other issues, rising concerns around climate change have become an extreme concern of 30% of CEOs in 2021, versus 24% in 2020, but still not quite factored into their risk management plans of organisations.
Many CEOs also asked questions about the potential for inflation and the possibility that global markets had priced in too perfect a recovery. “The tug-of-war between anxiety and optimism has only increased in recent weeks, with market volatility on the rise,” the survey said.
Workplaces are set to be reinvented with flexible work models becoming a permanent fixture for a range of roles, including sales, finance and technology, even as vaccine rollout continues. Again, the challenge will be larger for hospitality, transportation and retail industries where business model changes will be significant.
(Economic Times)
