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PwC: Geopolitical Threats Rise as CEO's Global Growth Confidence Falls

* Confidence in global economy falls by 10 points
* Concerns about geopolitical uncertainty increase sharply
* Revenue prospects decline in major economies
* 90% are changing how they use technology to assess and deliver on customer
and other stakeholder expectations

DAVOS, Switzerland, Jan. 19, 2016 (GLOBE NEWSWIRE) -- Two-thirds of CEOs (66%)
see more threats facing their businesses today than three years ago. Just
over a quarter (27%) believe global growth will improve over the next 12
months, a decline of 10 points on last year.

Infographics accompanying this announcement are available at






Videos accompanying this announcement are available at




In addition, findings from PwC's Annual Global CEO survey show only slightly
more than a third (35%) are very confident of their own company growth in the
coming year, down four points on last year (39%), and even one point below

The results, in PwC's Annual CEO Survey - 'Redefining business success in a
changing world' -

underline a gloomy outlook for the global economy in the next twelve months.
More than 1,400 CEOs were interviewed for the research, which is published
today at the opening of the World Economic Forum Annual Meeting in Davos,

China's economic rebalancing, crude oil price falls, and geopolitical security
concerns are all impacting an overall increase in uncertainty about the
global economy's growth prospects. Globally, only just over a quarter (27%)
of CEOs think global growth will improve over the next 12 months, compared to
37% last year, while 23% think it will worsen (2015: 17%). Levels of optimism
amongst North American CEOs is half that (16%) of the most optimistic regions
(Western Europe 33% and Middle East 34%). Almost a third of China's CEOs
(33%) believe global economic growth will slow down in 2016.


growth confidence falls

Confidence in businesses' own revenue growth for the next 12 months has also
fallen (35% 'very confident' vs 39% last year). Against this tide of
pessimism, CEOs in India (64%), Spain (54%) and Romania (50%) stand out as
more optimistic. The biggest turnaround is seen in Taiwan, where only 19%
are very confident of short-term company growth, compared to 65% last year -
an astonishing slump of 46 points. However, Switzerland has the lowest
confidence with only 16% of Swiss CEOs very confident of revenue growth
compared with 24% in 2015.

Confidence in revenue growth is also down compared to last year for nearly
every major economy in the world: China 24% (2015: 36%), United States 33%
(2015: 46%), United Kingdom 33% (2015: 39%) and Germany 28% (2015: 35%).
Italy 20% (2015: 20%) and Japan 28% (2015: 27%) remained static. Only Russia
bucks the trend as confidence rose to 26% from a deep low of 16% last year.

Looking at investment prospects, the US, China, Germany and the UK remain the
countries CEOs view as most important for growth in the next 12 months.
Mexico and the UAE have also entered the top ten in place of Indonesia and

Commenting on the survey results, Dennis Nally, Global Chairman of PwC, says:

"There's no question that business leaders' confidence in both the global
economy and their own company growth prospects has taken a knock. No matter
what the business size, the threats it faces are becoming more complex,
crossing the borders of geopolitics, regulation, cyber security, societal
development, people, and reputation.
There is a new spectrum of risk for CEOs that represents threats to both
national and commercial interests.

"The pessimistic outlook for the year ahead is reinforced by the position of
the US, China, Germany and the UK as being the most important
for growth again. The fact that CEOs continue to point to these 'safe havens'
underlines the general uncertainty about where real growth will come from in
the long term


CEOs see more threats

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

As in most years the spectre of over-regulation is seen as the top threat to
companies' growth prospects, with 79% of CEOs citing this - the fourth year
in a row that concerns about regulation have risen. However geopolitical
uncertainty has jumped from fourth in CEO concerns last year to second this
year, cited by 74% of business leaders. As a result, concerns about
availability of key skills have dropped from second to fourth, but remain a
concern for nearly three quarters (72%) of CEOs. Worries about exchange rate
volatility are in third place (73%).

Cyber security is also a worry for 61% of CEOs, representing threats to both
national and commercial interests. Concern is highest amongst CEOs in the US,
Australia and the UK (74%+) and in the banking, technology and insurance

Skills and recruitment

Nearly half (48%) of CEOs plan to increase their headcount over the next 12
months, a slight drop on last year (50%). Business recruitment activity is
highest in India (70%), the UK (66%) and China (57%).

Concerns about the availability of key skills remains high (72%). Several
sectors have particularly high levels of concern, topped by entertainment and
media, and technology, while sectors more traditionally aligned with 'STEM'
skills including manufacturing, pharmaceuticals and life sciences, also
feature. Geographically, concerns are highest in Asia Pacific (81%), the
Middle East (83%) and Africa (86%), and lowest in Western Europe (59%).

Nearly half of CEOs say they are changing how they develop their pipeline of
leaders (49%), suggesting business leaders' recognition of the wider skills
the next generation of CEOs will need to tackle a more complex environment
encompassing technology, wider threats, and expectations of stakeholders for
their organisations. Perhaps reflecting CEO's wider views on rising
stakeholder expectations and business trust issues, 41% said they were
focusing more on workplace culture and behaviours.


The top priority for government should be a clear and effective tax system,
say 56% of CEOs, followed by a skilled, educated and adaptable workforce
(53%), and infrastructure (50%) - both physical and digital.

However CEOs tended to not rate their governments highly - particularly around
the effectiveness of the tax system, and income equality. Two thirds (67%)
cite a stable tax system as being more important than low tax rates.

Around a third (33%) rate governments as ineffective at safeguarding personal
data (26% effective), with China (46%), the US (60%), Brazil (72%) and
Argentina (52%) having the highest levels of concern.


The survey underlines technology's force in business for change and better
customer and stakeholder understanding.

Nine out of ten (90%) CEOs say they are changing how they use technology to
assess customer and wider stakeholder expectations, and deliver against them.
The most significant levels of change are reported in sectors with
traditionally high customer service expectations including banking and
capital markets (90%), insurance (95%), hospitality and leisure (94%) and
healthcare (93%). Overall, more than three quarters (77%) believe
technological advances will have transformed expectations of businesses over
the next five years.

Data and analytical tools, and CRM systems are seen as having the greatest
return for stakeholder engagement. This is followed by R&D and innovation
cited by 53% of CEOs globally, with CEOs in Taiwan (76%), Brazil (72%) and
Germany (67%) prioritising it higher than the global average.

Internally however, technology&data analytics still has untapped potential. In
talent management, only 4% report using predictive workforce analytics, and
16% use it to focus on productivity. Concerns about the speed of
technological change as a threat to growth prospects is being felt most
acutely in the banking and capital markets sector (81%), 20% higher than the
global average (61%), followed entertainment and media (79%), and technology
(66%) sectors - mirrored in CEOs concerns about skills in these sectors.

Trust and purpose in business

This year's survey examines how CEOs are preparing to respond to changing
customer and wider stakeholder expectations of business. 59% of CEOs say
businesses need to do more to communicate their purpose and values.

Trust is certainly a concern, as CEOs consider changing stakeholder needs.
More than a half (55%) of CEOs are concerned about the lack of trust in
business, compared with 37% just three years ago.

But there are barriers to responding to changing expectations. Many CEOs (45%)
say additional cost is stopping them from taking action to respond to greater
expectations. Unclear or inconsistent standards and regulations, cited by 42%
of CEOs, is also a significant barrier.

In five years' time, more than three quarters (77%) believe technological
advances will have transformed expectations of businesses on communication,
reporting, investment and planning. In addition, 71% of CEOs believe that in
five years' time, successful companies will be guided by a purpose centred on
creating value for wider stakeholders. 87% say companies will prioritise
long-term over short-term profitability. Overall they believe that customer
and other stakeholder needs will be more important than shareholders' in
successful organisations.

Adds Dennis Nally:


The CEO environment is a challenging one

. They recognise the wider stakeholder expectations of their business.
Reshaping companies built on profit alone into ones where profit and purpose
combine, is not going to happen quickly or easily, but it's a transformation
that is already starting and that businesses need to keep pace with."

Notes to editors:

About the survey:

PwC's 19th Annual Global CEO Survey was conducted during the last quarter ...

Författare WKR

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