The findings of the 12th survey of PwC Cyprus are revealing
PwC presented the key findings of its 12th survey of CEOs in Cyprus, at a special event entitled “Challenges of today and tomorrow”. The 159 CEOs in Cyprus as well as the 4,410 CEOs from 105 countries, who participated in PwC's Annual Global Survey, expect a decrease in global economic growth over the next 12 months. The conditions that prevail in the international scene have made the CEOs to be very pessimistic about the course of the global economy, which is confirmed by the responses to the survey with 69% of the CEOs in Cyprus considering that it will decrease.
< p>These bleak outlooks are the most pessimistic CEOs have expressed on global economic growth since the question was first asked 12 years ago, marking a significant departure from the upbeat outlook for 2021 and 2022. Somewhat more CEOs are optimistic about the course of the Cypriot economy, as the percentage of those who believe that it will shrink (56%) is smaller compared to the equivalent for the course of the global economy.
However, CEOs are more optimistic regarding the increase in their own company's revenues with 48% stating that they are moderately optimistic. A correspondingly large trend of optimism for the prospects of increasing their own company's revenues is also noted in the Eurozone and Globally.
Almost 40% of CEOs believe that in a decade their organization will not be financially viable
One of the most important findings of this year's research is the concern of CEOs about the sustainability of their businesses. When asked if their company will be financially viable in the future, if they maintain their current operating model, 40% of CEOs in Cyprus and 39% in the Eurozone and Global answered that their company will not be financially viable within the decade. When asked about the forces most likely to affect their industry's profitability over the next 10 years, 60% cited people and skills shortages, 59% technology and 58% supply chain disruption. Only 41% highlighted the transition to new energy sources and the impact they will have.
The main concerns
The main concerns of Cyprus' business leaders in the next 12 months concern inflation (47%), geopolitical risks (41%) and macroeconomic instability (26%), which also worries society in general. The main differences compared to last year are the decline of “health risks”, which dominated the threats, while now they are significantly lower in the 5th place, in the ranking of threats to Cyprus.
< p>When the question broadens the time horizon of concerns to the next five years, CEOs in Cyprus are more concerned about geopolitical conflicts with 42%, inflation with 34% and macroeconomic instability with 30%. It is worth noting that due to the geographical position of Cyprus, geopolitical risks have always ranked high among their concerns.
Countermeasures to the challenges
Of particular importance is the way business leaders react to the multi-level challenges they face. In an effort to mitigate their exposure to the effects of geopolitical conflict, nearly half (48%) plan to adjust their presence in existing markets and expand into new ones, while 42% are considering diversifying the product/service they provide. In their effort to respond to the risks arising from economic instability they have started to reduce their operating costs (47%), cooperate with other suppliers (47%) and increase the prices of their products/services (40%) .
They do not reduce wages and jobs
Efforts to reduce the operating costs of businesses are not directed, as it appears, in the direction of reducing wages. 81% of CEOs in Cyprus state that whatever happens they will not reduce the existing salaries of their people. At the same time, a significant percentage of 65% declare that they will not reduce human resources and 63% that they will not delay the agreements they have concluded.
Commenting on the survey, the CEO of PwC Cyprus, Philip Sosylos said :
“The 159 CEOs from Cyprus who participated in the survey, give us a clear picture of what gives them optimism, but mainly of what worries them in this difficult time. The multiple crises we are facing today are mainly due to the acceleration of the so-called megatrends and the difficulty of getting ahead of them. Events in recent years, such as the COVID-19 pandemic and the war in Ukraine, have accelerated megatrends such as technological innovation and development, climate change, geopolitical shifts and social uncertainty. The bet now is to move in a timely and transformative way across the spectrum of society, the economy, entrepreneurship and governance”.
To see the results of the survey, click here.