The annual CEO survey conducted by PwC accounting & consulting firm, among 4,410 CEOs from 105 different countries, also shows that nearly 40% of the CEOs believe that their organizations will not be profitable in the upcoming decade unless they reorganize.
According to the annual CEO survey of the accounting and consulting firm PwC73% of CEOs around the world believe that the growth of the global economy will slow down in the upcoming year. The survey was conducted among 4,410 CEOs from 105 countries during October-November 2022. This dark forecast is the most pessimistic that CEOs have given for global economic growth in the past 12 years, and is significantly different from the optimistic forecasts of 2021 and 2022, when more than two-thirds of the CEOs (76% and 77% respectively) believed that the economic growth would increase.
The survey also shows that nearly 40% of the CEOs believe that their organizations will not be profitable in the next decade, unless they make changes and reorganize their companies. The confidence of the CEOs in the growth prospects of their companies has decreased significantly since last year (-26%) , the biggest drop since the financial crisis of 2008-2009, which stood on a 58% drop.
In the view of the CEOs, inflation, macroeconomic volatility and geopolitical conflicts are the biggest threats in the year 2023 year and throughout the next five following years.
In response to the current economic situation along with the forecasts for 2023, CEOs are looking to cut costs and encourage revenue growth. 52% of CEOs report reducing operating costs, while 51% report raising prices and 48% diversify product and service offerings. However, more than half (60%) testified that they do not plan to reduce their workforce in the upcoming year and 80% indicate that they do not plan to reduce the wages of employees.
“A volatile economy, inflation for a decade and geopolitical conflicts have contributed to pessimism among CEOs at a level not seen in over a decade. Accordingly, CEOs all over the world are reevaluating their operating models and cutting costs.” says Bob Moritz, global chairman of PwC. And adds: “Despite these pressures, they continue to put their people first. In order to survive the coming years – not to mention grow – they must carefully balance short-term threat mitigation and operational requirements with long-term consequences – as businesses that do not adapt and change, simply will not be profitable.”
“The answers of the CEOs to the annual survey conducted this year reflect the concern and uncertainty that characterizes the economy and the global geopolitical situation at this time. There is no doubt that there is pessimism among the CEOs in regards to growth forecasts.” Adds Doron Sadan, the managing partner of PwC Israel. “For me, the bright spot of the survey, once again, lies in human capital, because most of the CEOs stated that the solutions will come from activities of operational efficiency, examination of price strategy and entry into new areas and not necessarily from harming workplaces or the employment conditions of the employees.”