- Global CEOs have become increasingly pessimistic about global economic growth in the past year and expect their businesses to suffer in the short to medium term as a result.
- CEOs have traditionally seen the US as the most attractive place to invest, but it is close to losing that crown, with China and India rising rapidly in the rankings.
- CEOs are less concerned with threats like terrorism and global warming, and are instead trying to react to geopolitical uncertainty brought about by populism and changing national policies.
Global CEOs praised 2018 as a year of strong global growth but by the end of the year they’d changed their minds completely.
PwC’s annual global CEO survey, released Monday on the eve of the World Economic Forum in Davos, Switzerland, found that 30% of those surveyed were projecting a decline in global economic growth in 2019, up from a mere 5% the previous year.
Pessimism about the economy is fuelled by the constantly shifting policy landscape across the world which is dividing countries, the survey showed.
In the Middle East and Europe the findings were starkest with 38% and 33% of those surveyed pessimistic about global growth for this year.
Meanwhile, optimism among North America’s CEOs dropped the most sharply, from 63% to 37%, while the percentage signalling a slowdown in global growth moved from a negligible 3% to 28%.
The US is close to losing its top spot as the most desired destination for investment outside of a CEO’s region, according to the survey which canvassed 1,378 chief executives in more than 90 territories. The share of CEOs selecting the US as their top market for growth dropped 41% in the past year.
“Number one was always US, in the last couple of years, and then China. Both of them have still remained one and two, but have come down significantly, opening the door for other countries,” said PwC’s global chairman Bob Moritz in an interview with CNBC in Davos.
“India is one of those countries. When you look at what Prime Minister Modi has done to that country,” he added.
Over-regulation is still the number one concern for global CEOs but policy uncertainty is now the second most important issue with trade conflicts also much higher on this year’s survey.
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.