CEOs are more optimistic than ever about economy
Business leaders’ optimism about the short-term economy is at its highest point in a decade despite, well, crises seemingly in every direction you look. (A short list includes a two-year-long pandemic, record inflation, supply shortages, the “Great Resignation,” and the past seven years being Earth’s seven hottest on record.)
That’s according to accounting giant PwC’s latest Global CEO Survey.
The annual survey, now in its 25th year, polled 4,446 CEOs worldwide in late fall of 2021, which, it’s worth noting, was also before the omicron wave broke.
Still, just 15% of them said they believe economic conditions can get any worse in 2022 — a relatable position, perhaps — but the vast majority, 77%, go even further, predicting “a stronger global economy in the coming year.” PwC says this is the “most confident” that global CEOs responding to its survey have been since 2012, when recovery from the Great Recession was in full swing.
It’s fair to say respondents worldwide are optimistic, but breaking their answers down country by country muddies the waters a bit. Optimism was highest in India, where 94% of CEOs anticipate global growth in the coming year, six points higher than last year. It climbed among CEOs in Japan as well (up 16 points to 83%), and in the UK (up five points to 82%), then leapt a ton in Italy (up 18 points to 89%) and France, which recorded the biggest increase (up 25 points to 85%).
Meanwhile, optimism took a hard tumble in four very big, key countries: the U.S. (down 18 points to 70%), China (down nine points to 62%), Brazil (down eight points to 77%) and Germany (down four points to 76%). Tellingly, however, American CEOs told PwC they’re just as confident as CEOs in India about their own company’s 2022 growth prospects — in both countries, about 40% are “extremely confident” that they’ll achieve revenue growth this year.
In his statement, PwC’s global chairman, Bob Moritz, writes that this level of optimism “speaks to the strength and resilience of the global economy and the ability of CEOs to manage through uncertainty.” He sums it up like this: “There is nothing ‘normal’ about the world we are working in, but we are getting used to it.”
The looming question — Why? —is not one PwC answers. Other first-of-theyear reports in recent days paint bleaker pictures for 2022. The World Bank released one warning that the world’s poorest countries face $35 billion in debt repayments this year, enough to potentially push some to the brink of default. In the run-up to Davos, the World Economic Forum just released its annual global risks report. Answers to a question asking 1,000 global leaders to identify the planet’s most imminent risks read like themes from a Cormac McCarthy novel: “extreme weather,” “livelihood crises,” “infectious diseases,” “debt crises” and “social cohesion erosion.” Even in PwC’s own survey, CEOs still said despite their optimism that they worry in the coming year about cyber threats, health crises, climate change, geopolitical conflict, social inequality and “macroeconomic volatility.”
Broader context might be revealing: PwC notes CEOs tend to be “less concerned” about crises, whatever kind they are — COVID-19, climate change or social inequality — if they “appear to pose smaller immediate threats to revenue.” And last year, CEOs also expressed a record high amount of optimism about the global economy, 76%, just one point lower than in 2022.
Yet the optimism score for these two years, as it were, is some 50-plus points more than 2020’s, a very low 23%, for a survey conducted in 2019, months before the pandemic had even started.