The chief executive officers of some of the world’s biggest companies are showing record levels of pessimism about the global economy, according to research released at the World Economic Forum annual meeting in Davos, Switzerland.
More than half (53%) predict a decline in the rate of economic growth in 2020, up from 29% in 2019 and just 5% in 2018, PricewaterhouseCoopers 23rd survey of almost 1,600 CEOs from 83 countries has revealed.
The number of CEOs projecting a rise in the rate of economic growth dropped from 42% in 2019 to 22% for 2020.
CEO pessimism is particularly high in North America, Western Europe and the Middle East, with 63%, 59% and 57% of CEOs respectively predicting lower global growth in the year ahead.
Business leaders also lack confidence in their own companies’ growth prospects for the year ahead, with only 27% of CEOs saying they are “very confident” about the next 12 months, the lowest level since 2009.
However, there are regional variations, with China and India showing the highest levels of confidence among major economies, where 45% and 40% of CEOs respectively are ‘very confident’ of growth, compared to the US at 36%, Canada at 27%, the UK at 26%, Germany at 20%, France 18%, and Japan just 11%.
Bob Moritz (pictured), chairman, of the PwC Network, said: “Given the lingering uncertainty over trade tensions, geopolitical issues and the lack of agreement on how to deal with climate change, the drop in confidence in economic growth is not surprising – even if the scale of the change in mood is.
“These challenges facing the global economy are not new, however the scale of them and the speed at which some of them are escalating is new; the key issue for leaders gathering in Davos is, how are we going to come together to tackle them?”
He added that amid the pessimism there were real opportunities for business leaders.
“With an agile strategy, a sharp focus on the changing expectations of stakeholders, and the experience many have built up over the last 10 years in a challenging environment, business leaders can weather an economic downturn and continue to thrive,” he said.
Since 2008, the correlation between CEO confidence in their 12-month revenue growth and the actual growth achieved by the global economy has been very close.
This suggests global growth could slow to 2.4% in 2020, below many estimates including the 3.4% October growth prediction from the IMF.
Overall the US just retains its lead as the top market CEOs will look to for growth over the next 12 months at 30%, one percentage point ahead of China at 29%.
The other countries making the top five for growth are unchanged from last year – Germany (13%), India (9%) and the UK (9%), which is a strong result given the uncertainty caused by Brexit.
CEOs are also increasingly concerned about cyber threats and climate change, the research found.
PwC conducted 1,581 interviews with CEOs in 83 countries between September and October 2019.
