CEO optimism hits 10-year high

Some 85% of corporate leaders in Africa who participated in PwC’s 25th Annual Global CEO Survey expect global economic growth will improve this year.“The Covid-19 pandemic has pushed many organisations in Africa to rethink the way they operate and how they build trust and deliver sustained outcomes,” says Dion Shango, the territory senior partner of PwC Africa.“Optimism about growth prospects in Africa indicates greater resilience; Africa’s CEOs are leading their organisations more effectively, managing more complex scenarios, engaging with a broader set of stakeholders and acting with courage during uncertainty. They’re optimistic - and realistic - about the challenges and opportunities ahead,” Shango adds.PwC polled 4 446 CEOs in 89 countries and territories globally between October and November 2021. More than three-quarters of CEOs - 77% - predict the global economy will improve. This is the most optimistic CEOs have been in a decade, PwC says.CEO optimism for 2022 is a tick higher than the 76% optimism level from a year ago and 54 points higher than 2020, when more than half (53%) of CEOs predicted a declining economy.According to PwC global chairman Bob Moritz: “While the ongoing pandemic and emergence of new variants cast a shadow over the year, the high level of CEO optimism we found speaks to the strength and resilience of the global economy and the ability of CEOs to manage through uncertainty. “There is nothing “normal” about the world we are working in, but we are getting used to it. We are seeing differences in confidence among countries, and there is no shortage of challenges to navigate, but it is encouraging that CEOs we spoke with on the whole feel positive about 2022,” Moritz says.POWER OF TRUSTTrust has never been more important to a company’s success, and never more challenging to earn and maintain, PwC stresses.Based on CEO responses to a series of questions about their customers’ behaviours, the survey shows a correlation between customer trust and CEO confidence. CEOs of companies ranking highest on perceived customer trust are more confident in their growth prospects in the coming year. Seventy-one percent of CEOs of companies with the highest levels of trust are very or extremely confident in their companies’ prospects for revenue growth in the next 12 months, compared to just 47% of those with the lowest levels of trust.Trust was also found to be correlated with net-zero commitments. CEOs of companies ranked highest for trust are significantly more likely to lead organisations that have made a net-zero commitment (29%) than those ranked lowest for customer trust (16%). CEOs of “high-trust” companies are also more likely to lead organisations that have tied non-financial outcomes to their compensation. About half of CEOs who lead organisations ranked highest for trust have customer satisfaction (51%) and employee engagement metrics (46%) tied to their personal bonus or incentive plan.TOP CONCERNSCEOs’ optimism is high for the most part, but they are also well aware of potential threats that could impact their companies over the coming 12 months.Similar to last year, cyber and health risks rank as the leading global threats, identified by 49% and 48% of CEOs, respectively. Not far behind is macroeconomic volatility, with 43% of CEOs either very or extremely concerned about the potential impact of inflation, fluctuations in GDP and labour market issues in the coming year. Another major underlying concern is the ability to attract and retain talent - 69% of CEOs concerned about social inequality risks cite this as an impact, as do 62% of CEOs concerned about health risks.From an industry perspective, cyber risks are top of mind for financial services CEOs, 59% of whom cited cyber as a key threat. Notably, manufacturing (40%) and consumer (39%) CEOs displayed lower concern levels about cyber, despite those sectors’ high volume of cyberattacks. It bears watching to see if this relative level of complacency reverses itself over the coming year.HEALTH RISKSUnderstandably, a high percentage of hospitality and leisure CEOs (75%) are concerned about the impact of health risks on their business. And 49% of energy, utility and resource CEOs see climate change as a key threat in the coming year,15 points higher than the percentage across all industries.CEO perception of threats varies by geography. In Africa, health risks and macroeconomic volatility rank as the leading threats amongst 58% and 55% of CEOs respectively, followed by cyber risks as identified by 50% of CEOs.“CEOs in Africa are understandably concerned about health risks, not only the Covid-19 pandemic but also diseases like malaria, tuberculosis, HIV/Aids and others which have remained challenging for many years,” Shango says. He continues: “And yet Africa’s CEOs have managed health, macroeconomic and cyber risks, as well as social inequality and climate change, and built greater resilience over time. Experience is the greatest teacher. Africa’s CEOs are experienced in adversity and therefore optimistic about the future.”According to Moritz: “When CEOs look at the next 12 months, they are understandably concerned about potential threats to short-term performance that could result from disruptions, including macroeconomic volatility, cyber and health risks. “While threats such as climate change and social inequality are further down the list, it is critical not to lose focus on these more long-term issues as they will define what sort of world we live in and hand down to the next generation.”

CEO optimism hits 10-year high

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Republikein 2024-11-25

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CEO optimism hits 10-year high

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