PwC: CEO confidence rises despite new risks and uncertainty
(Thomson Reuters ONE) -
* Confidence in company growth rises
* Fifty two per cent of CEOs plan to increase number of jobs
* Concerns about over regulation and lack of key skills at record levels
* CEOs feel globalisation has done little to solve income inequality
DAVOS, Switzerland, Jan. 16, 2017 (GLOBE NEWSWIRE) -- While CEOs around the
world feel they have plenty to worry about in the year ahead, their confidence
in their own growth prospects and their outlook for the global economy are back
on the rise.
Graphics accompanying this announcement are available at
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In PwC's 20(th) annual survey of CEOs worldwide, 38% (2016: 35%) are very
confident about their company's growth prospects in the next 12 months while
29(%) (2016:27%) believe global economic growth will pick up in 2017.
The findings released today at the World Economic Forum in Davos show that while
business leaders are more positive in their outlook, their levels of concern
about economic uncertainty (82%), over-regulation (80%), availability of key
skills (77%) remain very high. Also worries about protectionism are growing,
with 59% of CEO concerned about protectionism, increasing to 64% for CEOs in the
United States and Mexico.
While positive on the benefits of globalisation in building the free movement of
capital, goods, and people, CEOs question whether globalisation has done
anything to close the gap between rich and poor or mitigated the issue of
climate change. This is in contrast to the first PwC CEO survey in 1998 when
CEOs were positive about the drivers of globalisation.
Bob Moritz, Global Chairman, PwC, comments:
"Despite a tumultuous 2016, CEO confidence is moving back up - albeit slowly and
still a long way from the levels we saw back in 2007. But there are signs of
optimism right across the globe, including in the UK and US, where despite
predictions of a Trump slump and a Brexit exit, CEOs confidence in their
company's growth are up from 2016. And that mood is reflected elsewhere, with
more CEOs across the world targeting the US and UK for investment than a year
ago.
"While CEOs are more confident in the opportunity for growth, this year they
told us these three concerns that were top of mind: a people and technology
strategy that creates a workforce fit for the digital age; preserving trust in
their businesses in a world of increasingly virtual interactions; and making
globalisation work for everyone by engaging ever more with society and
collaborating to find solutions. All topics that will be high up the Davos
agenda."
Confidence in revenue growth climbs
In sharp contrast to 2016, CEO's confidence in their own one year revenue growth
is on the rise in nearly every major country across the world.with India (71%),
Brazil, where confidence levels have more than doubled (57%), Australia (43%)
and the UK (41%) topping the table. Confidence also rose by 11 points in China
to 35%, 6 points in the US to 39% and 3 points in Germany to 31%. In Switzerland
confidence levels have more than doubled to 34%.
Bucking the confidence trend are Mexico and Japan where confidence levels have
dropped, markedly so in Japan where confidence has plunged from 28% in 2016 to
14% today.
When asked what drives growth, organic expansion tops the agenda for over three
quarters of CEOs (79%) in the coming year, while 41% are planning new merger and
acquisition activity in 2017 and nearly a quarter (23%) of all CEOs intend to
strengthen their innovation capabilities to capitalise on new opportunities.
Where CEOs will look for growth
PwC's first global CEO survey showed emerging markets - including China and
India - as a sure bet for success. But the changeability of markets, exacerbated
by currency volatility, has caused CEOs to turn to a greater mix of countries.
This year's survey shows the US, Germany and the UK have become bigger
priorities, while enthusiasm for investing in Brazil, India, Russia and
Argentina has lessened from three years ago.
The top five most important countries for growth identified are the US (1),
China (2), Germany (3), the UK (4) and Japan (5) with the UK rising in
popularity as a growth destination with CEOs from the US (+4%), China (+11%),
Germany (+8%) and Switzerland (+25%).
Shanghai, New York, London, and Beijing were also identified as the top four
cities most important to an organization's overall growth prospects over the
next 12 months.
Globalisation
58% of business leaders think it's become harder to balance globalisation with
rising trends in protectionism. The concerns contrast with their views in the
first PwC CEO survey which reported 'the typical global corporation has as much
freedom of trade as it needs'.
For the past 20 years CEOs have been largely positive about the contribution of
globalisation to the free movement of capital, goods, and people. However, this
year's survey respondents are sceptical that it has mitigated climate change or
helped close the gap between rich and poor. This is similar to the public's view
on these issues in a separate consumer poll commissioned by PwC of over 5000
people in 22 countries.
Only 38% of the public believed globalisation has had a largely positive impact
on improving the movement of capital, people, goods and information, compared
with 60% of CEOs. Almost two thirds (64%) of the public believe globalisation
has helped create full and meaningful employment, contrasting with over three
quarters of CEOs (76%). The public are also less convinced than business leaders
that globalisation has created, to a large extent, a skilled and educated
workforce (29% of the public vs 37% of CEOs).
"Public discontent has the potential to erode trust which is needed for long
term sustainable performance. The real challenge here though, isn't just one of
how CEOs navigate, it's about the need for CEOs to have a deeper, two-way
relationship with stakeholders, customers, employees, and the public.
Understanding the root cause of the potential discontent or perception is a
critical first step towards communicating the benefits of business for society.
There's a lot at stake if we do not achieve inclusive global growth," comments
Bob Moritz.
Technology and Trust
CEOs tell us that technology is now inseparable from business' reputation,
skills and recruitment, competition and growth. Almost a quarter believe
technology will completely reshape competition in their industry over the next
five years (23%).
In an increasingly digital-driven world, technology has created a new dynamic
between business and customers bringing huge benefits for both. However on the
flip side 69% of CEOs say it is harder to gain and keep people's trust in this
environment and 87% believe risks from use of social media could have a negative
impact on the level of trust in their industry. 91% of CEOs also agree data
privacy and ethics issues could impact people's trust in their organisations in
the next five years.
Twenty years ago, trust wasn't high on the business radar for CEOs. 15 years ago
only 12% of CEOs thought public trust in companies had greatly declined. This
year, 58% worry that a lack of trust in business will harm their company's
growth, up from 37% in 2013.
After several high-profile technology and security issues for big companies,
CEOs unsurprisingly identify cyber security, data privacy breaches and IT
disruptions as the top three technology threats to stakeholder trust.
"CEOs expect it to become harder to sustain trust in the digital era. But
competitive advantage will go to those with the greatest capacity to turn
technology into their strength when coupled with the ability to connect with
their stakeholders in an on-going relationship grounded in trust," added Bob
Moritz.
Skills and jobs
Concern about skills has more than doubled in 20 years (from 31% concerned in
1998 to 77% in 2017) and human capital is a top three business priority, with
diversity and inclusiveness and workforce mobility amongst the strategies being
used to address future skills needs. Skills availability is a concern for over
three quarters (77%) of business leaders, and is highest for CEOs in Africa
(80%), and Asia Pacific (82%).
Over half of CEOs (52% vs 48% 2016) expect to increase headcount over next 12
months. The UK (63%), China (60%), India (67%) and Canada (64%) are amongst
those with the most ambitious hiring plans. Looking by industry it is CEOs in
the Asset Management (64%), Healthcare (64%) and Technology (59%) that have the
most ambitious hiring plans, with CEOs in the Government and public sector (32%)
having the least.
While only 16% of business leaders surveyed expect to reduce their overall
employee base, CEOs say that 80% of those affected jobs will be impacted in some
way by the use of technology or automation. Business leaders in Canada (100%),
US (95%), Germany (93%), Australia (92%), and Brazil (91%) see technology having
the greatest impact.
Over half of business leaders interviewed (52%) are already exploring the
benefits of how humans and machines can work together, and two out five (39%)
are considering the impact of artificial intelligence on future skills needs.
With the speed of technological change a concern for 70% of CEOs, it's no
surprise that skills in creativity and innovation, leadership and emotional
intelligence are identified as the most valuable skills, that CEOs are finding
it difficult to recruit. Digital and STEM skills are a recruitment issue for
over half of business leaders.
Bob Moritz, Global Chairman, PwC concludes:
"CEO's are concerned that key skill shortages will impair their company's growth
potential, relevance and sustainability. And it's soft skills that they value
the most. Innovation and relationship skills can't be coded. So to drive the
change CEOs need - thinking carefully and actioning accordingly - a balance
between technology and irreplaceable skills in their people is key. Managing
expectations with stakeholders will help enable the needed trust to survive and
thrive. Bottom line - prioritizing the human element in a more virtual world
will be a pre-requisite for future success."
Notes to editors:
1. This survey was carried out between September and December 2016. 1379 CEOs
responded from 79 countries, to online, postal, face to face and phone
interviews. 57% worked in privately owned companies, 43% in publicly listed
companies. 36% worked at companies with revenues over $1bn PA; 38% between
$101-$999bn PA; and 21% with revenues of less than $100m.
2. Growth confidence: The highest levels of confidence in 12 month growth for
companies was recorded in 2007 - 52% of CEOs said they were very confidence
of growth in the next 12 months. The lowest was in 2009 (21%). The highest
levels of three year confidence previously recorded was 51% of CEOs (very
confident) in 2011, similar to this year's survey. 2014 recorded the highest
ever levels of CEO confidence in global economic growth improving (44%).
3. The public survey took place in December in 22 countries - USA, Canada, UK,
France, Germany, Netherlands, China & Hong Kong, Italy, Spain, Russia,
Australia, Japan, India, Brazil, South Korea, Mexico, Sweden, Switzerland,
South Africa, Singapore, and United Arab Emirates.
4. List of country/regional CEO saying they are very confident of 12 month
growth.
+--------------------------------------------------+
| Very confident of short-term revenue growth |
+--------------+--------+--------+--------+--------+
| | 2017 | 2016 | 2015 | 2014 |
+--------------+--------+--------+--------+--------+
| India | 71 % | 64 % | 62 % | 49 % |
+--------------+--------+--------+--------+--------+
| Brazil | 57 % | 24 % | 30 % | 42 % |
+--------------+--------+--------+--------+--------+
| Romania | 52 % | 50 % | 44 % | 39 % |
+--------------+--------+--------+--------+--------+
| Spain | 50 % | 54 % | 35 % | 23 % |
+--------------+--------+--------+--------+--------+
| Australia | 43 % | 35 % | 43 % | 34 % |
+--------------+--------+--------+--------+--------+
| UK | 41 % | 33 % | 39 % | 27 % |
+--------------+--------+--------+--------+--------+
| Argentina | 40 % | 42 % | 17 % | 10 % |
+--------------+--------+--------+--------+--------+
| US | 39 % | 33 % | 46 % | 36 % |
+--------------+--------+--------+--------+--------+
| Denmark | 39 % | 30 % | 33 % | 44 % |
+--------------+--------+--------+--------+--------+
| Mexico | 38 % | 46 % | 50 % | 51 % |
+--------------+--------+--------+--------+--------+
| Global | 38 % | 35 % | 39 % | 39 % |
+--------------+--------+--------+--------+--------+
| Canada | 38 % | 31 % | 36 % | 27 % |
+--------------+--------+--------+--------+--------+
| Italy | 38 % | 20 % | 20 % | 27 % |
+--------------+--------+--------+--------+--------+
| Nordic | 37 % | 31 % | 26 % | *** |
+--------------+--------+--------+--------+--------+
| China | 35 % | 24 % | 36 % | 48 % |
+--------------+--------+--------+--------+--------+
| Switzerland | 34 % | 16 % | 24 % | 42 % |
+--------------+--------+--------+--------+--------+
| South Africa | 33 % | 37 % | 39 % | 25 % |
+--------------+--------+--------+--------+--------+
| ASEAN** | 32 % | 38 % | 47 % | 45 % |
+--------------+--------+--------+--------+--------+
| Germany | 31 % | 28 % | 35 % | 33 % |
+--------------+--------+--------+--------+--------+
| Russia | 31 % | 26 % | 16 % | 53 % |
+--------------+--------+--------+--------+--------+
| Africa* | 28 % | 42 % | *** | *** |
+--------------+--------+--------+--------+--------+
| Hong Kong | 27 % | *** | *** | *** |
+--------------+--------+--------+--------+--------+
| Japan | 14 % | 28 % | 27 % | 27 % |
+--------------+--------+--------+--------+--------+
| Venezuela | 13 % | *** | *** | *** |
+--------------+--------+--------+--------+--------+
* Africa excludes South Africa
** The ASEAN countries in which interviews were conducted are: Cambodia,
Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam
*** Not available
1. List of CEOs planning job increases by industry.
+---------------------------------------------------------------------+
| Percentage of CEOs expected to boost headcount |
+---------------------------------+--------+--------+--------+--------+
| | 2017 | 2016 | 2015 | 2014 |
+---------------------------------+--------+--------+--------+--------+
| Asset and Wealth Management | 64 % | 65 % | 61 % | 58 % |
+---------------------------------+--------+--------+--------+--------+
| Healthcare | 64 % | 56 % | 59 % | 53 % |
+---------------------------------+--------+--------+--------+--------+
| Technology | 59 % | 67 % | 55 % | 63 % |
+---------------------------------+--------+--------+--------+--------+
| Business services | 57 % | 51 % | 56 % | 62 % |
+---------------------------------+--------+--------+--------+--------+
| Hospitality & Leisure | 55 % | 53 % | 45 % | 51 % |
+---------------------------------+--------+--------+--------+--------+
| Mining | 55 % | 45 % | 52 % | 25 % |
+---------------------------------+--------+--------+--------+--------+
| Industrial Manufacturing | 54 % | 47 % | 53 % | 46 % |
+---------------------------------+--------+--------+--------+--------+
| Retail | 53 % | 51 % | 46 % | 51 % |
+---------------------------------+--------+--------+--------+--------+
| Transport & Logistics | 53 % | 51 % | 49 % | 40 % |
+---------------------------------+--------+--------+--------+--------+
| Communications | 51 % | 48 % | 40 % | 52 % |
+---------------------------------+--------+--------+--------+--------+
| Power & Utilities | 51 % | 42 % | 36 % | 36 % |
+---------------------------------+--------+--------+--------+--------+
| Engineering & Construction | 50 % | 42 % | 51 % | 51 % |
+---------------------------------+--------+--------+--------+--------+
| Entertainment & Media | 48 % | 39 % | 46 % | 53 % |
+---------------------------------+--------+--------+--------+--------+
| Pharmaceuticals & Life Sciences | 46 % | 64 % | 58 % | 44 % |
+---------------------------------+--------+--------+--------+--------+
| Banking & Capital Markets | 45 % | 43 % | 53 % | 52 % |
+---------------------------------+--------+--------+--------+--------+
| Automotive | 43 % | 48 % | 49 % | 45 % |
+---------------------------------+--------+--------+--------+--------+
| Insurance | 41 % | 49 % | 50 % | 59 % |
+---------------------------------+--------+--------+--------+--------+
| Metals | 41 % | 32 % | 41 % | 22 % |
+---------------------------------+--------+--------+--------+--------+
| Energy (includes Oil & Gas) | 41 % | *** | *** | *** |
+---------------------------------+--------+--------+--------+--------+
| Chemicals | 40 % | 46 % | 50 % | 49 % |
+---------------------------------+--------+--------+--------+--------+
| Consumer Goods | 40 % | 41 % | 40 % | 46 % |
+---------------------------------+--------+--------+--------+--------+
| Forest, Paper & Packaging | 35 % | 36 % | 27 % | 45 % |
+---------------------------------+--------+--------+--------+--------+
| Government/public services | 32 % | *** | *** | *** |
+---------------------------------+--------+--------+--------+--------+
*** Not available
About PwC
At PwC, our purpose is to build trust in society and solve important problems.
We're a network of firms in 157 countries with more than 223,000 people who are
committed to delivering quality in assurance, advisory and tax services. Find
out more and tell us what matters to you by visiting us at www.pwc.com.
PwC refers to the PwC network and/or one or more of its member firms, each of
which is a separate legal entity. Please see www.pwc.com/structure for further
details.
© 2017 PwC. All rights reserved
Contact:
Mike Davies (on site at Davos), PwC
Mobile: +44 7803 974 136
Email: mike.davies(at)pwc.com
More details: http://press.pwc.com, ceosurvey.pwc
Follow/retweet: (at)pwc
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: PwC via GlobeNewswire
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Datum: 16.01.2017 - 18:30 Uhr
Sprache: Deutsch
News-ID 517806
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