CEO optimism booms despite rising anxiety over threats to growth


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A record-breaking number of CEOs are optimistic about the economic environment worldwide, at least in the short term. This is one of the key findings of PwC始s 21st survey of almost 1,300 CEOs around the world, launched at the World Economic Forum Annual Meeting in Davos, Switzerland.

The Hungarian CEO survey, detailing the local picture, will be published on March 8.

Fifty-seven percent of global business leaders say they believe global economic growth will improve in the next 12 months. This is almost twice the level of last year (29%), and the largest increase since PwC began asking about global growth in 2012.聽

"I始m very confident about Hungarian economic growth," said Nick K贸s, PwC Hungary始s Country Managing Partner. "As regards global growth, I believe the key influencing factors will be the United States and China. Global CEOs are rightfully optimistic, as we look forward to a more peaceful year: the Chinese economy is performing well, and tensions have calmed in the eurozone."聽

"There will be general elections in Hungary in a few months始 time, so now it is very exciting to find out what Hungarian CEOs think about the Hungarian economy and their own growth prospects," noted K贸s. "After the results of PwC始s Global CEO Survey are revealed at the World Economic Forum in Davos, we will release the Hungarian survey findings in March," he added.聽聽

This optimism in the economy is feeding into CEOs始 confidence about their own companies始 outlook. Some 42% percent of CEOs said they are "very confident" in their own organization始s growth prospects over the next 12 months, up from 38% last year.聽聽

The top three most confident sectors for their own 12-month prospects this year are Technology (48%), Business Services (46%), and Pharmaceutical & Life Sciences (46%).聽聽

CEO confidence in the U.S. market extends overseas, with non-U.S. based CEOs once again voting it the top market for growth in the next 12 months. This year, the United States reinforced its lead on China (46% vs. 33%, respectively, with the States始 lead over China up 2 percentage points compared with 2017). Germany (20%) remains in third place, followed by the United Kingdom (15%) in fourth.聽聽

Impact of technology聽聽

While recent research by PwC showed that workers are optimistic about technology improving their job prospects, CEOs admit that helping employees retrain, and increasing transparency on how automation and AI could impact jobs, is becoming a more important issue for them.

Two-thirds of CEOs believe they have a responsibility to retrain employees whose roles are replaced by technology, chiefly among the Engineering & Construction (73%), Technology (71%), and Communications (77%) sectors.聽

The digital and automation transition is particularly acute in the Financial Services sector. Almost a quarter (24%) of Banking & Capital Markets and Insurance CEOs plan workforce reductions, with 28% of Banking & Capital Markets jobs likely to be lost to a large extent due to technology and automation.聽聽

Threats to growth聽

In parallel with overall optimism, anxiety is nevertheless rising over a much broader range of business, social and economic threats. CEOs are said to be "extremely concerned" about geopolitical uncertainty (40%), cyber threats (40%), terrorism (41%), availability of key skills (38%), and populism (35%).

Underlining the shift, extreme concern about terrorism has doubled (41% in 2018 vs. 20% in 2017), as terrorism entered the top ten threats to growth. The threat of over-regulation remains the top concern for CEOs (42% extremely concerned), while more than a third (36%) remain concerned about an increasing tax burden.聽

"The higher level of concern is being driven by larger societal and geopolitical shifts rather than the dynamics of business leaders始 own markets," commented Bob Moritz, Global Chairman of PwC. "It始s clear their mid to long-term confidence in revenue growth is tempered by threats the business world is not used to tackling directly itself."聽


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