CEOs have a bit of a bad reputation these days but whether or not you agree with their ethics and motivations, we can all agree they are usually pretty good at analyzing data to predict economic trends. Indeed, it turns out that chief corporate executives tend to be pretty darn accurate when it comes to anticipating the cycles of the global economy.
With that in mind, it might be a good idea to check out how CEOs feel about global revenue prospects this year. To put it mildly: they are not too happy about it, if the PcW annual global CEO survey has anything to say about it. To be a little more specific, only 35 percent of all CEOs are “very confident” about the future of their company over the next 12 months. Last year, roughly 42 percent had confidence.
The PwC survey distinguishes that 44 percent of North American CEOs are “extremely concerned” about growing trade conflicts while only 38 percent in Asia-Pacific share the sentiment. At the same time, more than 60 percent of Chinese CEOs are so cautioned by the trade war they are already adjusting their sourcing and supply chain strategy. As a matter of fact, approximately 4 in 10 have already instituted production shifts and capital expenditure delays.
But a more important metric than measuring their own respective company growth, CEOs are even less optimistic about overall economic growth. This number dropped to nearly 30 percent as, it seems, most chief executives expect global economic growth to definitely decline within the next 12 months.
Last year, only 5 percent of CEOs projected this decline.
Now, it is important to also notice the majority of CEOs—more than 40 percent—believe global economic growth will actually improve next year, but that also means there has been a massive surge in those predicting a decline.
But does a PwC survey reflect real data?
Well, the IMF validates the survey—and CEO sentiment—with a prediction that global economic growth will slow from an estimated 3.7 percent last year to 3.5 percent by the end of this year. More importantly, perhaps, this 0.2 percentage point drop comes only three months after the initial IMF projection.