73% of CEOs expect global economic growth to decrease - survey

The survey included 4,410 CEOs in 105 countries and territories.

PwC Israel Managing Partner Doron Sadan (photo credit: Courtesy of PwC)
PwC Israel Managing Partner Doron Sadan
(photo credit: Courtesy of PwC)

Of the CEOs around the world, 73% expect global economic growth to decline in the next year, according to a survey conducted by PwC Global and published on Monday.

Two-thirds of private and public sector chief economists surveyed by the World Economic Forum (WEF) expect a global recession in 2023, the Davos organizer said on Monday as business and government leaders gathered for its annual meeting.

According to the survey, which was published as world leaders gather later this week in Davos for the WEF and included 4,410 CEOs in 105 countries and territories, the outlook is a significant change from survey results in 2021 and 2022, when more than two-thirds of CEOs surveyed believed economic growth would increase.

Furthermore, nearly 40% of CEOs surveyed said they think their companies will not be economically viable in 10 years if they continue in their current direction, including 46% of telecommunications CEOs, 43% of manufacturing CEOs, 42% of healthcare CEOs and 41% of technology CEOs. Additionally, CEOs’ confidence in their company’s potential for growth decreased by 26% since last year, the largest decline since the 2008-2009 financial crisis, during which a 58% decrease was recorded.

A total of 56% of CEOs surveyed believe changing customer demand/preferences will impact profitability, while 53% believe changing regulations will impact profitability, 52% believe labor and skills shortages will impact profitability and 49% believe technological disruptions will impact profitability.

Concerns about inflation, geopolitical conflict

“PwC's survey of CEOs this year reflects the concern and uncertainty that characterize the economy and global geopolitics at this time.”

PwC Israel Managing Partner Doron Sadan

While CEOs’ top concerns last year were cybersecurity and health, 40% of respondents this year said they are most concerned about inflation, 31% said they were most concerned about economic volatility, 25% said they were most concerned with geopolitical conflict, 20% said they were most concerned about cyber risks and 14% said they were most concerned about climate change.

How CEOs view climate risks

Although CEOs largely did not view climate change as a particularly great short-term risk compared to other short-term risks, 50% of respondents said they think the climate crisis will moderately or severely impact their cost profiles, 42% said they think it will impact their supply chains and 24% said they think it will affect their physical assets.

“PwC’s survey of CEOs this year reflects the concern and uncertainty that characterize the economy and global geopolitics at this time,” said PwC Israel managing partner Doron Sadan. “Strategic areas that took top priority last year such as cyber, digital transformation, and more, did not disappear from the agenda but gave way to new-old challenges that are keeping company heads busy in the current period.”

“There is no doubt that CEOs are pessimistic about growth forecasts. CEOs of companies must continue to engage in long-term thinking while addressing both short-term and long-term challenges.”

“For me, the bright spot of the survey once again lies in human capital,” he added. “In one of the survey questions, the CEOs were asked how they operate or plan to operate in order to prepare for the expected economic challenges. This is because most of the CEOs stated that they are already operating and plan to implement operational efficiency, examine pricing strategy and enter new markets. In terms of activity and preparation, most CEOs stated that they do not act or intend to act in regards to harming workplaces or the employment conditions of employees.”