NEW YORK, 17 March 2021: A PwC survey of more than 5,000 CEOs globally reveals record levels of optimism with 76% confident global economic growth will improve in 2021.
One year after COVID-19 was declared a pandemic, CEOs are voicing high optimism in the global economic recovery, with 76% of global business leaders predicting that economic growth will improve in 2021.
The figures come from PwC’s 24th Annual Global CEO Survey, which this year polled 5,050 CEOs in 100 countries and territories over January and February 2021.
The percentage of CEOs expressing confidence in growth is up from 22% in 2020 and 42% in 2019, representing the highest level of optimism since the survey started asking this question in 2012.
Optimism among CEOs over global economic growth is particularly strong in North America and Western Europe, with 86% and 76% of CEOs, respectively, from these regions predicting improved global growth in the year ahead.
“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 PwC Network chairman Bob Moritz.
Stretched balance sheets
“During the tumultuous past year, CEOs have had to rethink and reconfigure what they do and how they do it while dealing with stretched balance sheets and supporting employees who have been forced to navigate these extraordinary circumstances.
“CEOs now face two fundamental challenges: first, how to build trust with a broad range of stakeholders, whose expectations of business are higher than ever before; and second, how to adapt their businesses and deliver sustained outcomes in a rapidly changing external environment. Organisations that get this right will be best placed to come out of the pandemic as strong, resilient and productive businesses, able to withstand future shocks.”
CEOs are more optimistic about the outlook for their businesses. Some 36% of those polled said they are “very confident” about their organisation’s prospects for revenue growth over the next 12 months, up from 27% of CEOs in 2020.
While global confidence is up, there is wide variation across industries, reflecting the varying degrees to which consumer behaviour has been impacted by the pandemic. CEOs in the technology and telecommunications sectors show the highest levels of confidence at 45% and 43%, respectively. Meanwhile, CEOs in the transportation and logistics (29%) and hospitality and leisure (27%) sectors are among the least confident about their ability to grow revenues over the next 12 months.
The percentage of CEOs expressing concerns about climate change has risen from 24% in 2020 to 30% in 2021. This represents only a marginal increase in the context of COP26, which is being held this year in Glasgow, UK. The finding also comes in the context of rising anxiety about nearly all types of threats.
Climate change still only ranks ninth among CEOs’ perceived threats to growth. Furthermore, another 27% of CEOs report being “not concerned at all” or “not very concerned” about climate change. This may be because climate change is not seen as an immediate threat to growth compared to other issues such as the pandemic, over-regulation and cyber threats.
Meanwhile, 39% of the CEOs polled believe their organisation needs to do more to ‘measure’ their environmental impact. And 43% believe their organisation needs to do more to ‘report’ on it, a greater share than any other disclosure area. This is encouraging as more, and better corporate information on environmental impact is key to driving the change needed to get to a net-zero economy.
However, 60% of CEOs have not yet factored climate risks into their strategic risk management activities, which is concerning as climate change poses increasing the physical and transitional risk for the business. At a country level, CEOs in countries with high exposure to natural hazards, such as India and China, are some of the least prepared for climate change risk.
While 23% of CEOs plan to significantly increase investments in sustainability initiatives as a result of Covid-19, almost one-third of CEOs are planning no change at all.
Not surprisingly, pandemics and health crises top the list of threats to growth prospects, overtaking the fear of over-regulation, which has been the perennial number one concern for CEOs globally since 2014.
Rising digitisation is increasing the risks posed by cyber threats. This, coupled with the significant increase in cybersecurity incidents in 2020, including ransomware attacks, has resulted in cyber threats leaping up the list to become the number two concern, cited by 47% of CEOs compared to 33% in 2020. Cyber threats are a concern, particularly for CEOs in North America and Western Europe, where they are considered a greater threat than the pandemic.
Also rising rapidly up the list of CEO concerns is the spread of misinformation (28%, up from 16% in 2020), which has had an impact on elections, reputation, and public health – further contributing to a decline in trust across society.
Digital investments for the future
Asked about their spending on digital transformation, nearly half of CEOs (49%) project increases of 10% or more. Despite the rising level of concern CEOs are voicing about cyberattacks, this has not translated into definitive actions. Less than half of the CEOs planning for heightened digital investment are also planning to boost their spending on cybersecurity and data privacy by 10% or more.
Download the report at ceosurvey.pwc