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CEOs show record levels of pessimism over economic growth

posted onJanuary 22, 2020
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Most CEOs say global growth will slow in 2020, with 53% predicting a decline, according to PwC's 23rd CEO Global Survey launched on Monday (Jan. 20) at the World Economic Forum Annual Meeting in Davos, Switzerland. By contrast, the number of CEOs projecting a rise in the rate of economic growth dropped from 42% in 2019 to only 22% in 2020.  

CEO pessimism over global economic growth is particularly significant in North America, Western Europe and the Middle East, with 63%, 59% and 57% of CEOs from those regions predicting lower global growth in the year ahead. 

CEOs are also not so positive about their own companies’ prospects for the year ahead, with only 27% of CEOs saying they are “very confident” in their own organisation’s growth over the next 12 months.

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% and 40% respectively, the US at 36%, Canada at 27%, the UK at 26%, Germany at 20%, France 18%, and Japan having the least optimistic CEOs with only 11% of CEOs very confident of growing revenues in 2020. 

CEOs pesimistic over growth

(Source: Pwc 23rd Annual Global CEO survey)

China looks beyond the US for growth

Overall the US just retains its lead as the top market CEOs look to for growth over the next 12 months at 30%, one percentage point ahead of China at 29%. However, ongoing trade conflicts and political tensions have seriously dented the attractiveness of the US for China CEOs. In 2018, 59% of China CEOs selected the US as one of their top three growth markets, in 2020 this has dropped dramatically to just 11%.

The US loss has been Australia’s gain, with 45% of China CEOs now looking to Australia as a top three key growth market compared with only 9% two years ago.
The other countries making the top five for growth are unchanged from last year – Germany (13%), India (9%) and the UK (9%). A strong result for the UK given the uncertainty created by Brexit. Australia is just outside the top five boosted by its increased attractiveness for China CEOs.

“On a brighter note, while there is record pessimism amongst business leaders, there are still real opportunities out there. With an agile strategy, a sharp focus on the changing expectations of stakeholders, and the experience many have built up over the last ten years in a challenging environment, business leaders can weather an economic downturn and continue to thrive.” said Bob Moritz, Chairman, of the PwC Network. 

London-based PwC conducted 1,581 interviews with CEOs in 83 countries between September and October 2019.