Three quarters of CEOs expect growth in 2021, finds PwC survey
Three quarters (76%) of global CEOs expect a return to global economic growth in 2021, according to PwC’s 24th Annual Global CEO Survey. The survey polled more than 5,000 CEOs in 100 countries and territories in January and February 2021.
Most CEOs think the global economy bottomed out in 2020, and that it will bounce back this year amid a widespread vaccination campaign. In comparison, only 22% expected the economy to grow in 2020.
North American and European CEOs are particularly optimistic, with 86% and 76%, respectively, predicting improved global growth in 2021.
According to a recent report from FTI Consulting, companies in the G20 countries have experienced average revenue decline of 10% and a headcount decline of 12% in 2020.
"After a year of human tragedy and extensive economic hardship, it is encouraging to see that the people responsible for making investment decisions and hiring staff are feeling cautiously optimistic about the year ahead. CEOs have faith that growth will return, boosted by the rapid development of vaccines and their rollout in many parts of the world," said Bob Moritz, chairman of the PwC Network.
Many CEOs are likewise expecting their companies’ fortunes to improve. Approximately 36% said they are very confident about their company’s prospects for revenue growth in the next 12 months, up from 27% in 2020.
There is, of course, variation in optimism based on which industries have been most negatively affected by the pandemic. CEOs in transportation and logistics (29%) and hospitality and leisure (27%) were least confident about their prospects for revenue growth in the next year. Technology and telecom leaders were most confident, at 45% and 43%, respectively.
The US extended its lead as the top market CEOs are turning to for growth in the next year – jumping seven points ahead of China at 35%. The US was just one point ahead of China in 2020.
US CEOs, meanwhile, are shifting their focus from China as a growth driver to Canada and Mexico. America's neighbors to the north and south registered a 78% increase in interest from US CEOs compared to 2020.
In the global rankings for top growth destinations, Germany came in third after the US and China, at 17%. Post-Brexit UK (11%) leapfrogged India (8%) to take the fourth spot.
With their attention turned elsewhere, CEO’s ranked climate change as the ninth-highest threat to growth. Twenty-seven percent said they were either not at all or not very concerned about climate change.
Unsurprisingly, the pandemic and health crises topped the list of threats to growth prospects, jumping ahead of over-regulation, which has been the top concern for CEOs since 2014. Amid pandemic-fueled digitization and a higher rate of cyber breaches, cyber threats jumped to number two – cited by 47% of CEOs compared to 33% in 2020. CEOs in North America and Western Europe considered cyber threats an even bigger concern than the pandemic.
Tax policy uncertainty jumped into the top ten at seventh place, as more CEOs are worrying about the pandemic-fueled debt loads of global governments – which will inevitably lead to higher corporate tax rates. The UK has already announced it will hike corporate tax rates to 25% starting in 2023.
On the digital front, nearly half (49%) expect to increase spending on digital transformation projects by at least 10%. However, less than half of CEOs increasing their digital investments plan to boost cybersecurity spending by 10% or more.
A growing number of CEOs (36%) are also planning to leverage automation and technology to increase workforce productivity.
"At the pandemic's one year mark, we're at an inflection point as vaccination begins to ramp up around the world,” Moritz added. “Although the shape of the recovery remains unknown, it is clear that we cannot simply go back to the way things were before.”
