Although the Covid-19 pandemic has created a negative impact on society and the global economy, CEOs are more optimistic than ever over the past 10 years. This is the conclusion reached by PwC’s 25th Annual CEO Report. The survey was conducted with the participation of 4,446 CEOs from 89 countries during the period October to November 2021.
Specifically, three-quarters of respondents to the report expect a stronger global economy in 2022 and 77% predict a stronger global economy next year. Only 15% of respondents expect weaker conditions. Compared to last year’s levels, CEO optimism for 2022 is one point higher and 54 points higher than in 2020, when more than half (53%) of CEOs predicted a declining economy.
The report also shows a strong correlation between customer confidence and CEO optimism. In addition, it indicates whether a commitment to climate neutrality has been made. Cyberspace and health risks are ranked as the top global threats, followed by macroeconomic instability. Finally, climate neutrality commitments are not a priority, it seems. Less than a quarter of CEOs said their company had made such commitments.
Among the largest countries, India appears to show the most optimism, with 94% of CEOs expecting global growth in 2022, up from 88% last year. Optimism is also rising steadily among CEOs in Japan (up 16 points to 83%, from 67% last year) and is slightly higher in the UK (up 5 points to 82%). Italy and France have seen a surge in CEO optimism, possibly due to a stronger than expected economic recovery.
Based on survey participants’ responses about their customer behavior, there appears to be a correlation between customer trust and CEO optimism. CEOs of top-ranked companies in customer confidence appear more confident about their prospects for growth in 2022. Specifically, 71% of CEOs of the most confident companies are very or extremely confident about the prospects of increasing their revenue. businesses over the next 12 months, compared to only 47% of businesses with the lowest levels of trust.
Despite the great optimism, there is still a risk of threats that could affect businesses over the next 12 months. Cyber risks and health risks are ranked as the top global threats, as they come from the responses of 49% and 48% of CEOs, respectively. Macroeconomic instability follows closely, with 43% of CEOs being more or less worried about the potential impact of inflation, fluctuations in GDP and labor market problems in the coming year. A significant concern is the ability to attract and retain human resources as 69% of CEOs concerned about the risks of social inequality cite this as an impact, as well as 62% of CEOs concerned about health risks.
When CEOs are looking to increase their earnings during the year outside of their home country, the United States is seen as offering the best opportunities. Thus, 41% rank the United States among the top countries for growth prospects for their businesses over the next 12 months, compared to 35% in 2021. China ranks second overall, with 27%, compared to the last year’s ranking, followed by Germany. (18%) and the UK (17%, up six points from last year).
The survey underscores the need for greater progress in meeting global climate goals, with less than a third of CEOs saying their company is committed to reducing emissions. Only 22% of CEOs surveyed said their company had made a commitment to a zero carbon footprint (Net Zero), while 29% said they planned to make a commitment. Only a third of CEOs identified climate change as a major concern for 2022, reflecting the belief that it will not affect near-term revenue growth. Additionally, about 57% of CEOs who have not committed to zero carbon footprint or climate neutrality do not believe their companies produce significant amounts of greenhouse gas emissions.
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