CEO optimism hits 10-year high despite the ongoing pressure generated by the pandemic and market conditions such as rising inflation, supply chain disruptions and the ‘Great Resignation’ in parts of the world, said PwC recently when releasing results of a survey of 4,446 CEOs in 9 countries and territories between October and November 2021.
More than three-quarters of CEOs, 77%, predict the global economy will improve, while only 15% expect worsening conditions, PwC noted.
CEO optimism for 2022 is a tick higher than the 76% optimism level from a year ago and fully 54 points higher than 2020, when more than half (53%) of CEOs predicted a declining economy, the firm added.
Survey highlights
- Among the largest territories, optimism is highest in India, where 94% of CEOs anticipate global growth in the coming year, up from 88% last year.
- Optimism is also trending up solidly among CEOs in Japan (plus 16 points to 83%, from 67% last year), and is modestly higher in the UK (up five points to 82%).
- Italy and France saw large increases in CEO optimism, perhaps as a result of stronger than expected economic recoveries.
- CEO optimism in Italy reached 89%, up 18 points from a year ago, while France experienced the greatest increase in CEO optimism, soaring 25 points to 85%.
- At the other end of the spectrum, CEO optimism about the global economy declined most notably in the US, down 18 points to 70%, and was also slightly down in Brazil (dropping seven points to 77%), China (down nine points to 62%) and Germany (down four points to 76%), perhaps as inflation and supply chain constraints became more of an issue.
- While US CEOs may be less sanguine on the global economy, they are comparatively confident about their own companies’ growth prospects, with 40% extremely confident about achieving revenue growth in 2022.
- India CEOs are similarly confident in their companies’ outlook.
- CEOs of companies ranking highest on perceived customer trust are more confident in their growth prospects in the coming year. 71% of CEOs of companies with the highest levels of trust are very or extremely confident in their companies’ prospects for revenue growth in the next 12 months, compared to just 47% of those with the lowest levels of trust.
- CEOs of “high-trust” companies are also more likely to lead organisations that have tied non-financial outcomes to their compensation.
- About half of CEOs who lead organisations ranked highest for trust have customer satisfaction (51%) and employee engagement metrics (46%) tied to their personal bonus or incentive plan.
- Similar to last year, cyber and health risks rank as the leading global threats, identified by 49% and 48% of CEOs, respectively.
- Not far behind is macroeconomic volatility, with 43% of CEOs either very or extremely concerned about the potential impact of inflation, fluctuations in GDP and labour market issues in the coming year.
- Another major underlying concern is the ability to attract and retain talent - 69% of CEOs concerned about social inequality risks cite this as an impact, as do 62% of CEOs concerned about health risks.
- From an industry perspective, cyber risks are top of mind for financial services CEOs, 59% of whom cited cyber as a key threat.
- Notably, manufacturing (40%) and consumer (39%) CEOs displayed lower concern levels about cyber, despite those sectors’ high volume of cyber attacks. It bears watching to see if this relative level of complacency reverses itself over the coming year.
- CEO perception of threats varies by geography. More than half, 58%, of CEOs in Asia-Pacific are very or extremely concerned about health risks in the coming year (the exception is China, where only 42% of CEOs are highly concerned about health risks).
- By comparison, just 37% of Western Europe and 44% of North America CEOs have similar concerns about health risks.
- Conversely, only 44% of Asia Pacific CEOs are highly concerned about cyber risks (Australia, at 71%, is a notable exception), while North America CEOs show a higher level of concern (56%; 61% in the US), as well as Western Europe (50%; 66% in Switzerland).
