More than 5,000 chief executives globally expressed record optimism about economic growth a year after the World Health Organization declared COVID-19 a global pandemic, suggests a PwC survey.
The survey of 5,050 CEOs in 100 countries conducted earlier this year found 76 per cent forecasted improved economic growth in 2021.
The result is up from 22 per cent last year and 42 per cent in 2019.
“After a year of human tragedy and extensive economic hardship, it is encouraging to see that the people responsible for making investment decisions and hiring staff are feeling cautiously optimistic about the year ahead,” stated Bob Moritz, chairman of the PwC Network.
“CEOs have faith that growth will return, boosted by the rapid development of vaccines and their rollout in many parts of the world.”
It represents the highest level of optimism since the survey started asking this question in 2012.
Optimism was particularly strong in North America and Western Europe, at 86 per cent and 76 per cent, respectively.
The chief executives were also more optimistic about the outlook for their businesses with about 36 per cent expressing that they are “very confident” about their organization’s prospects for revenue growth over the next 12 months, up from 27 per cent in 2020.
CEOs in the technology and telecommunications sectors expressed the highest levels of confidence at 45 per cent and 43 per cent, respectively. Meanwhile, chief executives in hospitality and leisure were least confident at 27 per cent, followed by transportation and logistics at 29 per cent.
The United States is the leading market CEOs are looking to for growth at 35 per cent, seven percentage points ahead of China. The U.S. was only one point ahead of China last year.
New political developments and existing tensions is increasing the focus of U.S. CEOs on Canada and Mexico and reducing the emphasis on China.
The percentage of CEOs expressing concerns about climate change has risen to 30 per cent from 24 per cent in 2020. Yet, climate change still only ranks ninth among CEOs’ perceived threats to growth.
Another 27 per cent of CEOs said they were “not concerned at all” or “not very concerned” about climate change. This may be because climate change is not seen as an immediate threat to growth compared to other issues such as the pandemic, over-regulation and cyber threats, said PwC.
About 39 per cent of the CEOs polled said their organization needs to do more to “measure” their environmental impact and 43 per cent said they need to do more to “report” on it.
But six in 10 CEOs have not yet factored climate risks into their strategic risk management activities.
Pandemics and health crises topped the list of threats to growth prospects, overtaking the fear of over-regulation, which has been the perennial leading concern for CEOs globally since 2014.
Rising digitization is increasing the risks posed by cyber threats. A significant increase in cybersecurity incidents in 2020, including ransomware attacks, has resulted in cyber threats leaping up the list to become the second-biggest concern, cited by 47 per cent of CEOs, up from 33 per cent in 2020.
Also rising rapidly up the list of CEO concerns is the spread of misinformation (28 per cent, up from 16 per cent).
Tax policy uncertainty moved up and is a concern by 31 per cent, up from 19 per cent a year ago as growing government deficits are expected to result in higher taxes.
About 36 per cent of CEOs plan to use automation and technology to make their workforce more competitive, more than double the share of CEOs who said the same in 2016.
Moritz said the world is at an inflection point as vaccinations ramp up around the world.
“To achieve the kind of change that’s needed, CEOs will need to think differently and constantly evaluate their decisions and actions against broader societal impacts. In doing so, they’ll set a course that builds trust and delivers sustained outcomes for shareholders, society and our planet.”
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.