Bosses more gloomy on growth than at any time in past decade
Business leaders in western Europe and US most downbeat about future, survey shows
The 50th World Economic Forum in Davos is taking place under the umbrella theme of ‘renewing the concept of stakeholder capitalism’.
Chief executives are less confident about their companies’ sales growth than at any time in the past decade with some 53 per cent of business leaders globally believing economic growth will decline this year, according to PwC.
The survey, published on the eve of global political leaders and corporate executives gathering between Tuesday and Friday at the World Economic Forum in Davos, Switzerland, shows a rapid increase in pessimism in the space of two years.
Two years ago, only 5 per cent of chief executives polled by PwC expected a slowing of economic growth over the subsequent 12 months. However, that figure had surged to 29 per cent last year.
“Pessimism in global growth is in the ascendancy among top executives,” said Feargal O’Rourke, managing partner with PwC Ireland. “That’s a hell of a jump in a two-year period.”
The latest survey, involving 1,581 interviews with chief executives in 83 countries, including Ireland, found that business leaders in north America and western Europe to be the most downbeat.
“Given the lingering uncertainty over trade tensions, geopolitical issues and the lack of agreement on how to deal with climate change, the drop in confidence in economic growth is not surprising – even if the scale of the change in mood is,” said chairman of the PwC Network Bob Moritz.
“These challenges facing the global economy are not new, however the scale of them and the speed at which some of them are escalating is new. The key issue for leaders gathering in Davos is: how are we going to come together to tackle them.”
The 50th world forum in the Swiss alpine village is taking place under the umbrella theme of “renewing the concept of stakeholder capitalism to overcome income inequality, societal division and the climate crisis”.
Trump and Thunberg
While economic growth was outside the top 10 concerns of chief executives surveyed by PwC when assessing their companies’ prospects before Davos last year, it has now jumped into third place. That’s just behind trade conflicts and over-regulation, which has consistently topped the table for key worries.
The climate crisis and sustainability are shaping up to dominate the forum this year, with Swedish environmental activist Greta Thunberg appearing on a panel on Tuesday, shortly before US president Donald Trump, a climate change sceptic, delivers an address. Mr Trump’s speech will take place hours before his US Senate impeachment trial commences.
While chief executives surveyed by PwC showed signs of being increasingly concerned about global warming and environmental damage, this remains outside what they consider to be the top-10 threats to their own companies’ growth outlook for 2020.