One year after COVID-19 was declared a pandemic, CEOs are voicing record levels of optimism in global economic recovery, with 76% of global business leaders predicting an improvement in global GDP in 2021, according to PwC’s 24th Annual Global CEO Survey.
“After a year of uncertainties and economic difficulties during which they had to rethink their activity, the CEOs are very confident in economic growth. Although the health crisis remains the top threat, the percentage of optimistic respondents in this edition of the CEO Survey is the highest it has been in recent years. For example, in 2020, only 22% estimated a positive outlook for the economy, and 42% had such expectations in 2019. However, there are also a number of concerns. One I noticed refers to the volatility of fiscal policies which, influenced by rapidly accumulating public debt due to the pandemic, could lead to increased taxes in the short term”, said Ionuț Simion, Country Managing Partner, PwC Romania.
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 affected by the pandemic. CEOs in the technology and telecommunications sectors show the highest levels of confidence, at 45% and 43%, respectively. CEOs in the transportation and logistics (29%), hospitality and leisure (27%) sectors are among the least confident about their ability to grow revenues over the next 12 months.
Not surprisingly, pandemics and health crises top the list of threats to growth prospects, having overtaken the fear of over-regulation, which has been the number one concern for CEOs globally since 2014.
Rising digitalisation is increasing the risks posed by cyber threats. Coupled with the significant increase in cybersecurity incidents in 2020, including ransomware attacks, that has resulted in cyber threats leaping up the list to become the number two concern, as cited by 47% of CEOs, compared with 33% in 2020. When asked about their spending on digital transformation, nearly half of the CEOs (49%) project increases of 10% or more.
Another topic rising rapidly up the list of CEO concerns is the spread of misinformation (at 28%, up from 16% in 2020), which has had an impact on elections, reputations and public health – further contributing to a decline in trust across society.
In 2020, tax policy uncertainty ranked outside the top ten concerns for CEOs, with only 19% of CEOs reporting concerns. This year, it has increased rapidly in importance, leaping up to seventh place (31%), with CEOs undoubtedly watching government debts accumulate and realising that business taxes will likely need to rise.
Climate change still only ranks ninth in CEOs’ perceived threats to growth. The percentage of CEOs expressing concerns about climate change has risen from 24% in 2020 to 30% in 2021.