CEO optimism decade-high despite Covid disruption: PwC Global CEO Survey

CEO optimism is at its highest level in a decade despite record inflation, supply shortages and labour market disruptions brought on by the pandemic, says the latest editions of the PwC Global CEO Survey.

According to the survey's 25th annual edition, more than three-quarters of global chief executives, 77%, are hopeful that the global economy will improve whereas only 15% expect conditions to deteriorate.

The level of optimism is slightly higher than last year's 76% and a major turnaround from 2020, when more than half of CEOs foresaw the global financial crisis deepening, reads a press release issued on Monday.

This is the most confident corporate leaders around the world have been in the 25-year history of the survey since 2012, when the world began to exit the worst years of the global financial crisis.

PricewaterhouseCoopers (PwC), a multinational professional services network of firms, polled the opinions of nearly 4,500 CEOs from total 89 countries and territories between October and November in 2021– before the Omicron variant of Covid-19 led to a wave of record cases across the globe.

While there is general optimism among CEOs for economic growth in 2022, the perspective varies widely across individual countries and territories. 

Among the largest territories, optimism is highest in India, where 94% of CEOs anticipate global growth in the coming year, up from 88% last year. 

Optimism is also trending up solidly among CEOs in Japan (plus 16 points to 83%, from 67% last year), and is modestly higher in the UK (up five points to 82%). 

Italy and France saw large increases in CEO optimism, perhaps as a result of stronger than expected economic recoveries.

CEO optimism in Italy reached 89%, up 18 points from a year ago, while France experienced the greatest increase in CEO optimism, soaring 25 points to 85%.

At the other end of the spectrum, CEO optimism about the global economy declined most notably in the US, down 18 points to 70%, and was also slightly down in Brazil (dropping seven points to 77%), China (down nine points to 62%) and Germany (down four points to 76%), perhaps as inflation and supply chain constraints became more of an issue.

While US CEOs may be less sanguine about the global economy, they are comparatively confident about their own companies' growth prospects, with 40% extremely confident about achieving revenue growth in 2022. 

India CEOs are similarly confident in their companies' outlook.

The key findings of the survey include –  

Threats to the top line: CEOs are most concerned about cyber risks (49%) and the global health situation (48%) as the pandemic lingers. To understand what lies behind these views, we asked CEOs how they think each threat could inhibit their ability to achieve various business outcomes over the next 12 months. With the exception of social inequality, CEOs were most concerned about the potential of each threat to disrupt revenue.

Shifting goals and incentives: Despite rising interest in the environment, social, and governance, most CEOs report only having non-financial outcomes closely related to business performance (such as customer satisfaction, employee engagement, and automation or digitization) included in their long-term strategy. 

Much less well-represented, in strategies and compensation, are targets related to greenhouse gases emissions and gender representation or racial and ethnic diversity: For example, 13% or fewer of CEOs have such targets in their annual bonus or long-term incentive plan.

The long path to net-zero: Just 22% of respondents have made a net-zero commitment. The top three reasons CEOs cited for why their firm had not made carbon neutral or net-zero commitment: 1. They don't think their companies produce a meaningful amount of GHG emissions (57%); 2. Their company does not have the capabilities to measure its GHG emissions (55%), and 3. Their sector does not have an established decarbonisation approach (52%).