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CEOs’ curbed confidence spells caution

When it comes to global economic growth, quite a lot, as it turns out.

PWC 22nd Annual Global CEO Survey

PwC has been surveying the world’s chief executives since before the turn of the century — 1997, to be exact — so this year, we decided to take a look back, as well as forward, to analyse the predictive power of CEOs.

We found that CEO survey responses over the past decade reveal a strong correlation between chief executives’ expectations for their own organisations’ revenue growth and actual global GDP growth the following year.
In other words, CEOs’ revenue confidence can be considered a leading indicator of the direction of the global economy.

What do CEOs know about the future?


So what are CEOs saying about the year ahead?

PwC’s 22nd Annual Global CEO Survey of 1,378 chief executives in more than 90 territories explores that question and many others regarding the global business climate in 2019. Conducted in September and October of 2018, this year’s survey drills down on CEO insights in top-of-mind areas such as: Growth, Data and Analytics, and Artificial Intelligence.

Last year saw a record jump in optimism regarding global growth prospects in 2018, and this exuberance translated across regions. This year, by contrast, saw a record jump in pessimism, with nearly 30% of CEOs projecting a decline in global economic growth, up from a mere 5% last year. CEOs also reported a noteworthy dip in confidence in their own organisations’ revenue prospects over the short (12-month) and medium (three-year) term. If CEOs’ confidence continues to be a leading indicator, global economic growth will slow down in 2019.

Look inside-out for growth Across the survey rang a general theme of hunkering down as CEOs adapt to the strong nationalist and populist sentiment sweeping the globe. The threats they consider most pressing are less existential (e.g. terrorism, climate change) and more related to the ease of doing business in the markets where they operate (e.g. overregulation, policy uncertainty, availability of key skills, trade conflicts). When asked to identify the most attractive foreign markets for investment, CEOs are narrowing their choices and expressing more uncertainty.

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Mind the information and skills gaps

In addition to the fault lines developing geopolitically, CEOs are working to bridge the gaps in their own capabilities. Organisations are struggling to translate a deluge of data into better decision making. There is a shortage of skilled talent to clean, integrate, and extract value from big data and move beyond baby steps toward artificial intelligence (AI). One of the more striking findings in this year’s survey was the fact that — despite billions of dollars of investment1 and priority positioning on the C-suite agenda — the gap between the information CEOs need and what they get has not closed in the past ten years.

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