Faced With Array of Risks, CEOs Increasingly Pessimistic

Worries also included over-regulation and cyber security, according to the poll conducted in the final quarter of 2015 and published at the World Economic Forum in the Swiss ski resort of Davos. The figure is down from last year’s 37 percent.

The International Monetary Fund cut its forecast for global and US economic growth in 2016.

Two-thirds said sentiment in their own revenue growth had declined, with only 35% saying they were very confident, compared to 39% previous year. Only Russia bucked the trend as confidence rose to 26 percent from a deep low of 16 percent past year. CEOs were asked which three countries, outside the one in which they were based, were most important for their overall growth prospects this year. It and the United Arab Emirates moved up into the top 10; Australia and Indonesia dropped off.

“There’s no question that business leaders’ confidence in both the global economy and their own company growth prospects has taken a knock”, said PwC global chairman Dennis Nally. However geopolitical uncertainty has jumped from fourth in CEO concerns last year to second this year, cited by 74% of business leaders. The corresponding report ranks cyberthreats as the eighth most feared impediment to business growth.

For Turkish CEOs, the rising geopolitical risks will be the biggest threat for their businesses over the next year. “There is a new spectrum of risks for CEOs that represents threats to both national and commercial interests”.

Amid an election season featuring calls by Democrats for a crackdown on Wall Street and new taxes aimed at the wealthy, 90 percent of American CEOs surveyed said they are concerned about the prospect of overregulation.

With heightened concerns about geopolitics, two thirds of CEOs (66%) now see more threats facing their business today than there were three years ago.

Ninety per cent of the Indian CEOs cited inadequate basic infrastructure as a major threat and 80 per cent mentioned exchange rate volatility and 77 per cent cited over-regulation.

While this was a slightly lower proportion than past year, there was a higher proportion of United Kingdom bosses who said they expect Britain’s job-rich recovery to gather momentum in 2016.

“CEOs are starting to think not just about the short-term demands of profitability and revenue growth but also… what’s going on with technology today and the impact it’s having – in terms of how services and products are delivered, digitization – that’s turning businesses upside down”, he said.

About countries most important for their companies’ growth in the next one year, 54 per cent said it was the U.S. while 29 per cent respondents mentioned China and 23 per cent went for the UK.

PwC says it is “surprised” to discover how quickly CEO’s mindsets are changing around corporate responsibility, with more than a quarter believing that their customers are seeking relationships with organizations that address wider societal needs.