The percentage of CEOs who believe global economic growth will improve over the next 12 months has more than doubled. At the same time, the percentage of CEOs concerned about the long-term viability of their businesses has risen to 45% as pressures from technology and climate intensify, according to PwC's 27th Annual Global CEO Survey, released today .
From research, which polled 4,702 CEOs from 105 countries and territories, found that 38% of respondents are optimistic about the growth prospects of the global economy over the next 12 months, compared to 18% in 2023. CEOs' predictions for < strong>economic recessionhave also fallen from last year's survey record 73% to 45% this year, as potential exposure to inflation and macroeconomic volatility fell by 16 percentage points (to 24%) and 7 percentage points (to 24%) respectively. Despite ongoing conflict, the percentage of CEOs who believe their company is very or overly exposed to the risk of geopolitical conflict fell by 7 percentage points (to 18%).
CEOs in most regions of the world are optimistic about the prospects of domestic economic development. Additionally, they are more likely to grow than downsize their staff over the next 12 months, with 39% saying they expect to increase their staff by 5% or more. In every geographic region, employers are more likely to increase than reduce staff, with the Middle East the most optimistic for hiring (65%).
While the outlook is positive, trust remains fragile as mega-trends such as technological evolution converge – with genetic artificial intelligence as a typical example – and climate transition. Nearly half (45%) of CEOs believe that their company will not be sustainable in a decade if it remains as it is today – up from 39% in 2023. Reflecting uncertainty about how to manage megatrends, CEOs are less optimistic than last year about their own company's revenue growth prospects over the next 12 months – down from 42% to 37%.
Bob Moritz, PwC Global Network President, said:
“As business leaders < /strong>they are less concerned about macroeconomic challenges, they are more focused on the challenges of the industries in which they operate. Despite growing optimism about the global economy, they are actually less optimistic than last year about their own revenue prospects and more aware of the need for fundamental transformation of their businesses. Whether it's accelerating the implementation of genetic AI or building their business to meet the challenges and opportunities of climate change, this is a transformative year.”
The opportunity of Artificial Intelligence
Overwhelmingly, CEOs see genetic AI as a catalyst for evolutionthat will boost efficiency, innovation and transformation. Almost 3/4 (70%) believe it will significantly change the way their company produces, delivers and receives value in the next three years.
CEOs are also optimistic about the short-term impact. In the next 12 months, nearly three-fifths (58%) expect the quality of their products or services to improve, and nearly half (48%) claim their ability to build trusting relationships with stakeholders will be enhanced. They also expect better results for their business – 41% expect it to positively impact revenue and 46% expect it to positively impact profitability. The technology, media and communications sector appears more positive about the impact on earnings (54%), while the energy and utilities sector is less optimistic (36%).< /p>
However, CEOs increasingly look to the transformative benefits of genetic artificial intelligence, the large majority state that it will require the upgrading of human resources skills (69%). Business leaders are also concerned about the resulting increase in cybersecurity risks (64%), misinformation (52%), legal liabilities and
reputational risks (46%), as well as bias against specific groups of customers or employees (34%) in their companies.
CEOs report progress on climate priorities
As CEOs determine their priorities, many of them see the climate transition as a challenge that, in addition to risks, also offers unique opportunities. Nearly 1/3 expect climate change to change the way they create, deliver and capture value over the next three years – compared to less than 1/4 who had reported something similar for the past 5 years.
Progress is also being recorded in terms of the implementation of the commitments of business leaders in practice. 76% have started or completed steps to improve energy efficiency, while 58% say they have taken similar steps to innovate new, environmentally friendly products, services or technologies.
In contrast, only 45% report that they have made progress or completed integrating climate risk into financial planning (while 31% report that they do not intend to do so). The survey shows that there is significant support for decarbonisation, with only 26% stating that a lack of board or management support is at least a moderate barrier to decarbonisation. Instead, CEOs cite regulatory complexity (54%) and lower financial returns for green investments (51%) as the biggest obstacles to overcome.
Urgent need for evolution
As CEOs become increasingly aware of the mega-trends facing businesses worldwide, survey participants express increased concern about long-term sustainabilityof their businesses. Almost half (45%) note that they are concerned that their businesses will not be sustainable in the next decade without transformation – compared to 39% in 2023. But as CEOs take action, they face a number of challenges. Two-thirds (64%) say the regulatory framework is hindering their ability to redefine their business model, 55% point to competitive business challenges and 52% to a lack of skills in their company's workforce.
< p>An additional barrier is inefficiency. CEOs identify significant inefficiencies in a number of routine activities of their companies considering that approximately 40% of the time spent on these tasks is ineffective.
CEOs in Cyprus< /p>
As part of the global survey, PwC Cyprus will present the findings of the 13th local CEO survey at a special event scheduled for February 20, 2024. This year's survey included 102 CEOs from Cyprus, which demonstrates the interest of the business community in global and regional issues that affect their daily and future position.
