Economic improvement predicted this year – global CEOs

Business leaders are expecting a strong economic rebound this year, even as they see cyber and health risks and macroeconomic volatility as the top threats that are looming globally.

This was among the findings in the 25th PricewaterhouseCoopers (PwC) Annual Global CEO Survey, which showed that despite continued pressure brought on by the COVID-19 pandemic, rising inflation and supply chain disruption, business executives are the most optimistic they have been in 10 years about the prospects for a stronger economy in the coming year.

More than a third, 77 per cent, of business executives predict a stronger global economy this year, while 15 per cent said they expected weaker conditions.

The survey, which was carried out among 4,446 CEOs in 89 countries and territories between October and November 2021, said it found a “strong correlation between customer trust and CEO confidence as well as whether a net-zero commitment has been made”.

The document revealed that overall, CEOs were more concerned that geopolitical conflict, health risk, macroeconomic volatility, cyber risks and climate change could inhibit their ability to sell products and services.

More than 60 per cent of them were concerned that health risks and social inequality could hamper their ability to attract and retain key skills/training.

To a lesser extent, they were also concerned that cyber risks, social inequality, geopolitical conflict, climate change, macroeconomic volatility and health risks could inhibit their ability to innovate through technology or processes and to raise capital.

The CEOs identified the US as the most important growth destination globally over the next 12 months, followed by China.

“While there is general optimism for economic growth in 2022, this perspective varies widely across individual countries and territories. Among the largest territories, optimism is highest in India, where 94 per cent of CEOs anticipate global growth in the coming year, up from 88 per cent last year,” PwC said in a release on Tuesday.

The Caribbean was not singled out in the survey. However, Mike Bynoe, Territory Leader of PwC East Caribbean, said it was promising to see the high levels of optimism among business leaders.

However, he expressed concern about the high levels of anxiety among hospitality and leisure industry leaders.

“As we continue to struggle with the pandemic across the globe, it is comforting to see this level of optimism from CEOs. Of particular interest to us in the Eastern Caribbean however, is the high level of concern in the hospitality and leisure industry, which is, however, not a surprising finding, said Bynoe.

He pointed out that a high percentage of hospitality and leisure CEOs (75 per cent) were concerned about the impact of health risks on their business.

Similar to last year, cyber and health risks rank are the leading global threats, identified by 49 per cent and 48 per cent of CEOs, respectively.

“Cyber risks are top of mind for financial services CEOs, 59 per cent of whom cited cyber as a key threat. Notably, manufacturing (40 per cent) and consumer (39 per cent) CEOs displayed lower concern levels about cyber, despite those sectors’ high volume of cyber attacks. It bears watching to see if this relative level of complacency reverses itself over the coming year,” said the statement.

It added“Trust has never been more important to a company’s success, and never more challenging to earn and maintain.”

The survey showed that 71 per cent of CEOs of companies with the highest levels of trust are very or extremely confident in their companies’ prospects for revenue growth in the next 12 months, compared to just 47 per cent of those with the lowest levels of trust.

“It was also found to be correlated with net-zero commitments. CEOs of companies ranked highest for trust are significantly more likely to lead organisations that have made a net-zero commitment (29 per cent) than those ranked lowest for customer trust (16 per cent),” it added.

It also indicated that CEOs of “high-trust” companies were also more likely to lead organisations that have tied non-financial outcomes to their compensation.

“About half of CEOs who lead organisations ranked highest for trust have customer satisfaction (51 per cent) and employee engagement metrics (46 per cent) tied to their personal bonus or incentive plan. Forty-nine per cent of energy, utility and resource CEOs see climate change as a key threat in the coming year, 15 points higher than the percentage across all industries. marlonmadden@barbadostoday.bb