PwC Report: CEOs Foresee Global Economic Decline in 2023

Dike Onwuamaeze

The PwC’s 26th Annual Global CEO Survey which polled 4,410 CEOs in 105 countries has found that 73 per cent of Chief Executive Officers (CEOs) believed that global economic growth would decline over the next 12 months.  

The PwC stated that the bleak CEOs’ outlook for 2023 would be the most pessimistic regarding global economic growth since it began conducting this survey 12 years ago, adding that it would mark a significant departure from the optimistic outlooks of 2021 and 2022, when more than 76 per cent and 77 per cent, respectively thought that economic growth would improve.

The survey report stated that “in addition to a challenging environment, nearly 40 per cent of CEOs think their organisations will not be economically viable in a decade if they continue on their current path.
“The pattern is consistent across a range of sectors, including telecommunications (46 per cent), manufacturing (43 per cent), healthcare (42 per cent) and technology (41 per cent).”

The report further noted that CEOs’ confidence in their own company’s growth prospects also declined dramatically since last year by -26 per cent, the biggest drop since the 2008-2009 financial crisis when a 58 per cent decline was recorded.
“Globally, business confidence around economic growth varies starkly, with G7 economies, including France, (70 per cent v 63 per cent), Germany (94 per cent v 82 per cent) and the United Kingdom (84 per cent v 71 per cent) – all weighed down by an ongoing energy crisis – more pessimistic about their domestic growth prospects than they are about global growth,” the survey report said.

The CEOs also predicted multiple direct challenges to profitability within their own industries over the next 10- years. More than 56 per cent believed that changing customer demand/preferences would impact profitability, followed by changes in regulation 53 per cent, labour/skills shortages 52 per cent, and technology disruptions 49 per cent.

Moreover, inflation, macroeconomic volatility and geopolitical conflict topped the CEOs’ concerns.
The Global Chairman, PwC, Mr. Bob Moritz, said: “A volatile economy, decades-high inflation, and geopolitical conflict have contributed to a level of CEO pessimism not seen in over a decade. CEOs globally are consequently re-evaluating their operating models and cutting costs, yet despite these pressures, they are continuing to put their people front and centre as they look to retain talent in the wake of the ‘Great Resignation.’
“The world continues to change at a relentless pace, and the risks facing organisations, people – and the planet – will only continue to rise. If organisations are not only to thrive – but survive the next few years – they must carefully balance the dual imperative of mitigating short term risks and operational demands with long-term outcomes – as businesses that don’t transform, won’t be viable.”

Speaking in the same vein, the Regional Senior Partner, PwC West Africa, Mr. Uyi Akpata, noted that “our analysis shows that the CEOs who feel most exposed to climate change are more likely to take action to address it. But combating climate change requires a coordinated, long-term plan to address the risk fully. The public and private sectors must work together to achieve this. It’s easy to be overwhelmed by the challenge of climate change. We urge leaders to proactively break the climate challenge into manageable chunks so they can find—and create—opportunities.”
The CEOs, however, noted the need to collaborate with a wide range of stakeholders to build trust and deliver sustained outcomes if they are to generate long-term societal value.

Moritz said: “The risks facing organisations and society today cannot be addressed alone and in isolation. CEOs must therefore continue to collaborate with a wide range of public and private sector stakeholders to effectively mitigate those risks, build trust and generate long term value – for their businesses, society and the planet.”