Top executives have shown record levels of pessimism in the global economy, with 53 percent forecasting a decline in economic growth in 2020, up from 29 percent a year ago and five percent in 2018, a major report released yesterday finds.
PricewaterhouseCoopers (PwC), a multinational consultancy firm, conducted the survey among 1,581 chief executive officers from 83 countries between September and October of last year to know their views about the global economy and major challenges ahead.
On the other hand, the number of CEOs predicting a rise in global economic growth dropped nearly half to 22 percent this year from that of the previous year.
Top executives' pessimism over the global economic outlook is very significant in North America, Western Europe and the Middle East, with respectively 63, 59 and 57 percent of them projecting a decline in growth this year.
"I look at the pace of change; I look at the uncertainty in geopolitics; I look at the massive dislocation and rearrangement of global supply chains – there's no way anybody can predict what's going to happen in five years… The uncertainty we see today is unprecedented in the last 40 years. As a result, it's taking growth out of the global economy," said Spencer Fung, group CEO of Li & Fung in the report.
The executives are also not so confident about their own companies' prospects for revenue growth this year, with only 27 percent of them saying they are 'very confident' in their own organisation's growth prospects, the lowest level since 2009.
But it varies from country to country as 45 percent CEOs in are optimistic about their companies' revenue growth, while it is 11 percent in Japan.
CEOs also expressed increasing concern over uncertain economic growth, trade conflicts and other global disharmonies.
In the 2019 survey, uncertain economic growth was outside the top 10 concerns for CEOs, but this year it has leapt to third place. The top two threats for 2020 are: over-regulation and trade conflicts.
The executives are also concerned about cyber threats and climate change and environmental damage.
"As our survey shows, there is no shortage of factors inspiring uncertainty, whether those factors are structural, economic or technological. This represents a tough challenge for business leader," Bob Moritz, chairman of PwC Network.
But companies can act on opportunities only if they have the organisational agility that allows them to execute rather than simply react, he said.
"Building on foundations that are strong but not rigid, leaders must learn to make decisions and allocate resources and capital more nimbly," he noted.