CEOs extremely pessimistic about global economic growth in 2023: PwC

There were exceptions though: CEOs in Africa, Brazil, China, Japan and the Middle East are about as confident in their growth prospects as they were last year—and, in general, CEOs are more confident about their three-year revenue growth prospects compared to the shorter term.

CEOs in Brazil, Canada, China, India, Japan and the United States are more optimistic about the short-term growth prospects of their own countries than those of the world as a whole.

Technology investments are a top priority: around three-quarters of companies are focused on automation, upskilling and deploying advanced technologies such as artificial intelligence (AI).

Drilling down into the underlying rationale for those investments, roughly 60 per cent in each category is focused on reinventing the business for the future, and 40 per cent is concentrating on preserving the current business.

Forty per cent of global CEOs think their organisation will no longer be economically viable in ten years’ time, if it continues on its current course. That stark data point underscores a dual imperative facing 4,410 CEOs from 105 countries and territories who responded to the PwC survey.

Most of those CEOs feel it is critically important for them to reinvent their businesses for the future. They also face daunting near-term challenges, starting with the global economy, which nearly 75 per cent believe will see declining growth during the year ahead.

Twenty-nine per cent of global CEOs expect economic growth to improve in their countries or regions over the next 12 months.

Nearly 40 per cent of CEOs don’t think their companies will be economically viable a decade from now if they continue on their current path.

When asked about the forces most likely to impact their industry’s profitability over the next ten years, about half or more of surveyed CEOs cited changing customer preferences, regulatory change, skills shortages and technology disruption.

Roughly 40 per cent flagged the transition to new energy sources and supply chain disruption. And nearly one-third pointed to the potential for new entrants from adjacent industries.

A majority of global CEOs expect some degree of impact from climate change in the next 12 months—primarily in their cost profiles (where approximately half expect a moderate, large or very large impact) and their supply chains (42 per cent). Fewer (24 per cent) are worried about climate-related damage to their physical assets.

CEOs in China feel particularly exposed, with 65 per cent seeing the potential for impact in their cost profiles, 71 per cent in supply chains and 56 per cent in physical assets.

More than half of all CEOs in the survey, including 38 per cent of those at the biggest companies and 70 per cent of those at US companies, say that their company has no plans to apply an internal carbon price to decision-making, even though doing so could help them account for considerations like taxes and incentives, and clarify strategic trade-offs.

Measuring and communicating progress to critical stakeholders is another big challenge. In a separate recent PwC survey, 87 per cent of global investors said they think corporate reporting contains unsubstantiated sustainability claims, often referred to as ‘greenwashing’.

Inflation and macroeconomic volatility stand out more prominently than other key threats in the next 12 months than over the next five years.

Forty-three per cent of global CEOs said that leaders in their organisation don’t often encourage debate and dissent. Fifty-three per cent said their leaders don’t often tolerate small-scale failures. And 76 per cent said their leaders don’t often make independent strategic decisions for their function or division.

ALCHEMPro News Desk (DS)