Although the Covid-19 pandemic has created a negative impact on society and the world economy, CEOs are more optimistic than ever compared to the last 10 years. This is the conclusion reached by the 25th annual PwC CEO’s annual report. The survey was conducted with the participation of 4,446 CEOs from 89 countries during the period October – November 2021.
More specifically, three quarters of the respondents to the report expect a stronger global economy in 2022 and 77% predict a stronger global economy next year. Only 15% of the respondents expect weaker conditions. Compared to the last year’s levels, CEOs’ optimism for 2022 is one point higher, and 54 points higher than 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. Furthermore, it indicates whether a climate neutrality commitment has been made. Risks in cyberspace and health are ranked as the top global threats, followed by macroeconomic instability. Finally, climate neutrality commitments are not a priority, as it seems. Less than a quarter of CEOs said their companies had made such commitments.
Among the largest countries, India appears to have the highest optimism, with 94% of CEOs expecting global growth in 2022, up from 88% last year. Optimism is also steadily rising among CEOs in Japan (plus 16 points at 83%, up from 67% last year) and is slightly higher in the UK (plus five points at 82%). Italy and France have seen large increases in CEO optimism, perhaps as a result of stronger-than-expected economic recovery.
Based on the participants’ answers to the survey about their customers’ behavior it is shown a correlation between customer confidence and CEO optimism. The CEOs of the companies that are ranked higher in the customers’ trust appear more confident about their growth prospects during 2022. More specifically, 71% of the CEOs of the companies with the highest levels of trust are very or extremely confident about the prospects of increasing the revenues of their companies in the next 12 months, compared to only 47% of the companies with the lowest levels of trust.
Despite the high optimism, there is still the risk of threats that could affect companies in the next 12 months. Cyber and health risks are ranked as the main global threats, as it comes from the answers by 49% and 48% of CEOs, respectively. Macroeconomic instability follows by a narrow margin, with 43% of CEOs more or less worried about the potential impact of inflation, GDP fluctuations and labor market issues over the next 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 it as an impact, as well as 62% of CEOs concerned about health risks.
When CEOs are looking to increase their revenue during the year outside their home country, the US is considered to be offering the greatest opportunities. Thus, 41% rank the US as one of the top countries for the growth prospects of their companies in the next 12 months from 35% in 2021. China ranks second overall, with 27%, compared to the ranking last year, followed by Germany (18%) and the United Kingdom (17%, up six points from last year).
The survey highlights the need for greater progress in achieving global climate targets, with less than a third of CEOs saying their company is committed to reducing emissions. Only 22% of CEOs surveyed said their companies had committed to zero carbon footprint (Net Zero), while 29% said they were planning to commit. Only a third of CEOs identified climate change as a top concern for 2022, which reflects the belief that it will not affect revenue growth in the short term. Also, about 57% of CEOs who did not commit to zero carbon footprint or climate neutrality they don’t believe their companies are producing significant amounts of greenhouse gas emissions.
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