Three Quarters of CEOs Predict a Return to Growth in 2021

Three Quarters of CEOs Predict a Return to Growth in 2021
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One year after COVID-19 was declared a pandemic, CEOs are voicing record levels of optimism in the global economic recovery. 76% of global business leaders predicting that economic growth will improve in 2021. The figures come from PwC’s 24th Annual Global CEO Survey, which this year polled 5,050 CEOs in 100 countries and territories over January and February 2021.

The percentage of CEOs expressing confidence in growth is up from 22% in 2020 and 42% in 2019, representing the highest level of optimism since the survey started asking this question in 2012. Optimism among CEOs over global economic growth is particularly strong in North America and Western Europe, with 86% and 76% of CEOs, respectively, from these regions predicting improved global growth in the year ahead.

“After a year of human tragedy and extensive economic hardship, it is encouraging to see that the people responsible for making investment decisions and hiring staff are feeling cautiously optimistic about the year ahead. CEOs have faith that growth will return, boosted by the rapid development of vaccines and their rollout in many parts of the world,“ said Bob Moritz, Chairman of the PwC Network.

“CEOs now face two fundamental challenges: first, how to build trust with a broad range of stakeholders, whose expectations of business are higher than ever before; and second, how to adapt their businesses and deliver sustained outcomes in a rapidly changing external environment,“ added Moritz.

CEOs are more optimistic about the outlook for their businesses. Some 36% of those polled said they are “very confident“ about their organisation’s prospects for revenue growth over the next 12 months, up from 27% of CEOs in 2020. While global confidence is up, there is wide variation across industries. The percentage of CEOs expressing concerns about climate change has risen from 24% in 2020 to 30% in 2021. Not surprisingly, pandemics and health crises top the list of threats to growth prospects, overtaking the fear of over-regulation, which has been the perennial number one concern for CEOs globally since 2014.

Rising digitisation is increasing the risks posed by cyber threats. This, coupled with the significant increase in cybersecurity incidents in 2020 including ransomware attacks, has resulted in cyber threats leaping up the list to become the number two concern, cited by 47% of CEOs compared to 33% in 2020. In 2020, tax policy uncertainty ranked outside the top ten concerns for CEOs, with only 19% of CEOs concerned. This year, it has increased rapidly in importance, leaping up to seventh place (31%), with CEOs undoubtedly watching government debts accumulate and realising that business taxes will likely need to rise.

Asked about their spending on digital transformation, nearly half of CEOs (49%) project increases of 10% or more. Less than half of the CEOs planning for heightened digital investment are also planning to boost their spending on cybersecurity and data privacy by 10% or more. At the same time, a growing number of CEOs, 36%, plan to use automation and technology to make their workforce more competitive, more than double the share of CEOs who said the same in 2016.