The Strategist

PwC: Global business feels pessimistic in 2020

01/21/2020 - 09:02

Consulting and auditing company PwC has published the results of its annual survey of CEOs around the world. Last year 29% of the top managers polled expected a slowdown in economic growth; in this year, however, the number went up to 53%, which was a record high.

Blake Burkhart via flickr
Blake Burkhart via flickr
A survey conducted by PwC among 1,581 people from 83 countries was presented at the World Economic Forum in Davos, Switzerland. The study’s authors note that “at the beginning of the new decade, there was a record growth of pessimistic sentiments among company leaders regarding the prospects for the global economy... Since 2012, when we began to ask this question, there have never been so many pessimistic respondents among company leaders”. For comparison, the share of survey participants who predict an increase in economic growth has decreased from 42% in 2019 to 22% in 2020.

There are especially many pessimists regarding the growth of the global economy among company executives in North America, Western Europe and the Middle East: 63%, 59% and 57% of respondents from these regions, respectively, forecast a slowdown in global economic growth in the coming year.

The president of the PwC international network of companies, Bob Moritz, explains the growth of pessimistic sentiment: “Given the continuing uncertainty regarding tense trade relations, geopolitical problems and the lack of an agreed position to combat climate change, a decrease in confidence in further economic growth is not surprising. The world economy’s problems are not new, but their scale and speed, with which some of these problems escalate, have become new. For the leaders gathered in Davos, the key issue is to develop coordinated approaches to solving these problems.”

PwC notes that as early as 2019, uncertainty about the prospects for economic growth was not among the top ten threats to business growth prospects, taking 12th place in the ranking. In 2020, this threat immediately fell into third place, giving way to trade conflicts (another risk that company managers began to pay more attention to) and excessive regulation, which invariably leads the ranking of threats to company executives.

Respondents also express growing concern about cyber threats, as well as climate change and environmental damage.
However, the last problem is still not included in the top ten threats to business growth, since it, in the opinion of the managers surveyed, is overshadowed by the scale of other risks.