that’s why Austria’s top managers see the future as black as never before »Leadersnet

PwC CEO Survey shows that bosses are more than skeptical about the new decade Economic growth still expected to decline this year.

At the beginning of the new decade, CEO pessimism about the global economy reached a record level: worldwide, over half (53 percent) of corporate executives forecast a decline in the growth rate for 2020 – in Austria it is even over two thirds (68 percent). Compared to 29 percent in 2019 and only 5 percent in 2018, this is the highest increase in pessimism since PwC asked this question for the first time in 2012. This is shown by the results of PwC’s 23rd Global CEO Survey, which was published yesterday at the World Economic Forum in Davos. Around 1,600 CEOs from 83 countries worldwide were interviewed for the annual study.

While in 2019 42 percent of managers on the executive floors predicted an increase in economic growth, in 2020 only 22 percent will be optimistic about the future in 2020, in Austria it is only 12 percent. The CEOs are particularly pessimistic about global economic growth in North America (63 percent), Western Europe (59 percent) and the Middle East (57 percent). Here the executives forecast lower growth for their respective region for the coming year.

“The record high level of pessimism among Austrian executives reflects the most important economic forecasts that look very weak for 2020,” said Christine Catasta, Senior Partner at PwC Austria. “However, this also brings real opportunities with it. With a focused look at changing expectations of interest groups and experience values, domestic managers can survive an economic downturn and thus further expand Austria as a business location.”

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Dwindling confidence of the domestic CEOs in their own sales growth

Austria’s top managers are also not too positive about the growth prospects of their own companies. Only a third of CEOs (32 percent) say they are “very confident” about their organization’s revenue growth for the next twelve months. Worldwide, it is only 27 percent – a record low that has not been recorded since 2009.

Despite the waning confidence, there are country-specific differences: Among the largest economies, China has the highest level of trust with 45 percent and India with 40 percent, followed by the USA (36 percent), Canada (27 percent), Great Britain (26 percent), Germany (20 percent) and France (18 percent).

With regard to the question of their own growth prospects, the mood reversal of the CEOs has proven to be a striking indicator of global economic growth. The analysis of CEO forecasts since 2008 shows a close connection between the CEOs’ confidence in the sales growth expected for the next year and the actual growth rates of the global economy. If the trend of these analyzes continues, global growth could decline to 2.4 percent in 2020 and thus be below most forecasts, including those of the International Monetary Fund (IMF) from October 2019 (3.4 percent).

Germany is by far the most important market for Austrian companies

With a percentage point lead over China (29 percent), the United States (30 percent) barely defends its overall top position as the most popular market with growth prospects for the next twelve months among CEOs worldwide. Persistent trade conflicts and political tensions have had a negative impact on the attractiveness of the US for Chinese CEOs. While the U.S. was still one of the top 3 growth markets for over half (59 percent) of the CEOs in China in 2018, only 11 percent believe this in 2020 – a drastic decline.

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For Austria’s CEOs, our neighboring country Germany is the most attractive market with 71 percent, followed by the USA (32 percent) and China (24 percent).

© PwC

Upskilling: The internal challenge of higher qualification

Although the lack of key skills for CEOs remains one of the greatest threats to growth, domestic business leaders are nowhere near solving the problem. While executives agree that retraining and upgrading are the best way to fill the skills gap, only 21 percent of Austrian CEOs say they have made “significant progress” in setting up a training program.

“In the future we will have to invest even more in the training and further education of our employees. Executives from business, educators, government and civil society must work together to ensure that people in Austria remain productive and engaged in meaningful and rewarding work,” said Catasta.

Increasing concerns about protectionism and populism

When asked about the biggest threats to their organizations’ growth prospects in 2019, protectionism ended up outside the top five. Unlike this year, protectionism came first with 26 percent, followed by populism (24 percent) and trade threats ( 24 percent).

In addition, CEOs are increasingly concerned about cyber threats, climate change and environmental degradation. Despite the increase in extreme weather events, their intensity and the associated debate, the extent of other threats continues to overshadow climate change.

© PwC

Climate change: challenge or opportunity?

Although climate change is not one of the five biggest threats to the growth prospects of Austrian CEOs, they show a growing appreciation of the positive sides of measures to reduce their carbon footprint. Almost a quarter (24 percent) of CEOs fully agree that investments in climate protection initiatives increase the company’s reputation. Likewise, 24 percent expect climate change initiatives to lead to new product and service opportunities for their organization.

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“Given the continuing uncertainty surrounding trade tensions, political issues and the lack of consensus on how to deal with climate change, the loss of confidence in economic growth is not surprising, but the extent of the change in mood is surprising,” summarizes Christine Catasta. “The challenges facing the domestic economy are not new – but the scale and speed with which some issues are coming to a head has increased.”

More information and the full report can be found here: 23rd Annual Global CEO Survey (red / ots)


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