Three-Quarters of CEOs Expect a Stronger Economy in 2022

Despite the array of shifting headwinds, the CEOs that participated in the PwC survey are the most optimistic they have been in 10 years about the prospects for a stronger economy in the coming year. More than three-quarters of CEOs, 77%, predict the global economy will improve, while only 15% expect worsening conditions.

CEO optimism for 2022 is a tick higher than the 76% optimism level from a year ago and fully 54 points higher than 2020 when more than half (53%) of CEOs predicted a declining economy. The PwC’s 25th Annual Global CEO Survey polled 4,446 CEOs in 89 countries and territories between October and November 2021. 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 by 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.

Trust has never been more important to a company’s success, and never more challenging to earn and maintain. Based on CEO responses to a series of questions about their customers’ behaviors, the survey shows a correlation between customer trust and CEO confidence. CEOs of companies ranking highest on perceived customer trust are more confident in their growth prospects in the coming year. Seventy-one percent of CEOs of companies with the highest levels of trust are very or extremely confident in their companies’ prospects for revenue growth in the next 12 months, compared to just 47% of those with the lowest levels of trust.

CEOs’ optimism is high for the most part, but they are also well aware of potential threats that could impact their companies over the coming 12 months. Similar to last year, cyber and health risks rank as the leading global threats, identified by 49% and 48% of CEOs, respectively. Not far behind is macroeconomic volatility, with 43% of CEOs either very or extremely concerned about the potential impact of inflation, fluctuations in GDP, and labor market issues in the coming year. Another major underlying concern is the ability to attract and retain talent - 69% of CEOs concerned about social inequality risks cite this as an impact, as do 62% of CEOs concerned about health risks.

The survey shows that greater progress needs to be made to achieve global climate goals, as fewer than a third of CEOs said their company has made an emissions reduction commitment. Only 22% of the CEOs surveyed said their companies have made net-zero commitments; 29% said this commitment is in progress. A similar percentage – 26% – have made a carbon-neutral commitment while another 30% said this commitment is in progress.

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