PwC released its 23rd annual CEO Survey, revealing a record level of pessimism toward economic growth. Of the 1,581 chief executives surveyed, 53% predicted a decline in the rate of global GDP growth for 2020. That number had never exceeded 50% since the survey was first conducted in 2012.
The number of CEOs predicting an increase in GDP dropped to 22% from 42%, while 27% remain ‘very confident’ in their organization’s prospects for revenue growth.
It’s a striking contrast to the optimism CEOs expressed in 2018, when 57% expected global economic growth to increase.
Four primary themes emerge from the responses: uncertainty; cyber; retraining and upskilling of workers; and climate change.
Over-regulation remains the top global threat, while the availability of key skills, geopolitical uncertainty, technological change, climate change, and environmental damage also were cited.
More than half of the CEOs in the U.S. and China said they are adjusting their supply chain and sourcing strategies to combat uncertainties about economic growth and trade conflict. CEOs in China are taking additional measures to shift exports from the U.S. to Southeast Asia and Australia.
Uncertainties apply to big data, and potential regulations mitigating risks relating to data privacy, content moderation, and the size and reach of the giant tech companies. Other risks include variables involving increasing job automation, decreasing talent availability, decreasing mobility of skilled labor, and aging talent. Less than one in five CEOs report substantial progress on upskilling and retraining employees whose jobs potentially may become obsolete.
Climate change is a major issue, as nearly a quarter of CEOs recorded being extremely concerned about the climate crisis and environmental damage. In China, the most polluting country, 47% of CEOs named climate as a viable opportunity for new products and services, as opposed to 2% in 2010.
Companies and CEOs need to be more transparent about the risks they face, and the steps they are taking to overcome them. Leaders should consider the needs of all stakeholders when confronting challenges, and approach uncertainties as opportunities to build trust among their customers and within their communities.