Three-quarters of business leaders expect a stronger global economy in 2022
The ongoing COVID-19 pandemic, combined with rising inflation, supply chain disruption and the phenomenon of “Great Resignation” in various parts of the world, have posed the greatest challenges for business leaders, according to with the findings of the 25th Annual PwC Global Survey involving CEOs.
It is noteworthy that despite the many adversities, the CEOs who took part in the PwC survey are now expressing the highest levels of optimism in the last decade in terms of the prospects for a stronger economy within the next year. In particular, 77% expect an improvement in the global economy, while on the contrary, only 15% expect a worsening of conditions.
The corresponding optimism rate of CEOs in the 2021 survey was 76% while in 2020 more than half of CEOs (53%) predicted a recession. The survey was conducted from October to November 2021, with the participation of 4,446 CEOs from 89 countries.
Despite the general optimism recorded among CEOs for economic growth in 2022, there are strong differences from country to country. Bob Moritz, President of PwC's Global Network, says: economy but also the ability of CEOs to manage uncertainty. “We operate in a world where nothing is 'normal' anymore, but we are getting used to it.”
The power of trust
Trust is more important today than ever before for the success of a company, and building and maintaining it has never been more difficult. Taking into account CEOs' answers to a number of questions about their customers' behaviors, the research finds a correlation between customer confidence and CEOs' optimism. The CEOs of the companies that are ranked in the highest positions in terms of their customers' trust, as they perceive it, also express greater optimism for their growth prospects next year. 71% of the CEOs of the companies with the highest levels of trust say they are very or extremely optimistic about the prospects of increasing their revenues in the next 12 months, compared to only 47% of the companies with the lowest levels of trust.
The research also records the correlation between trust and commitments to achieve a zero balance of greenhouse gas emissions. CEOs of the highest-ranking companies in terms of confidence are much more likely to lead organizations that have announced their commitment to a zero-emission greenhouse gas balance (29%) than those in lower positions in the ranking in terms of consumer confidence (16%).
Risks in cyberspace and health are the biggest concerns of CEOs
As last year, cyber and health risks are emerging as the main threats globally, with 49% and 48% of CEOs reporting, respectively. Macroeconomic instability follows by a narrow margin, with 43% of CEOs expressing great or extremely high concern about the potential impact of inflation, GDP fluctuations and labor market issues within the next year. The ability to attract and retain talent is another major concern. This issue is cited as an impact by 69% of CEOs, who have expressed concern about the risks of social inequality, as well as by 62% who are concerned about the risks to health.
In the US, CEOs are looking forward to their growth prospects
When asked which country other than their own could provide them with revenue growth next year, the US is considered the destination with the greatest growth opportunities. 41% rank the US among the top destinations for growth prospects in the next 12 months, compared to 35% in 2021. China ranks second with 27%, a percentage similar to last year, followed by Germany (18%) and the United Kingdom (17%, six percentage points more than last year).
Commitments for zero greenhouse gas emissions commitments
The survey highlights the need for greater progress in meeting global climate targets, with less than a third of CEOs saying their company is committed to reducing carbon emissions.
At the same time, only a third of CEOs include climate change in their main concerns for next year, thus expressing the prevailing belief that it will not affect, in the short term, the growth of their revenues. In the long run, however, it is necessary to safeguard the crucial role of zero-balance sheet commitments in corporate strategies, not only to mitigate the risks of climate change, but also to meet the expectations of customers, investors and employees.
CEOs cite “mitigating the risks of climate change” as the factor that has most influenced their strategy for a zero-emission greenhouse gas balance (very large or large influence according to 63%). It follows with a small difference the response to consumer expectations (61%), reflecting the fact that taking action to address climate change is becoming increasingly important for a company's brand and providing the value that its customers expect.
CEOs in Cyprus
As part of the global research, PwC Cyprus will present for the 11th consecutive year its local research on Cyprus. The survey involved 161 CEOs, a record number of participants, reflecting the growing interest of the business community. The relevant research will be presented in March as part of a special event.