CEO Survey Finds Jump In Pessimism On Global Economic Growth

A lot of global business leaders have soured on the economy in the last year.
An annual survey of more than 1,300 CEOs from around the world found a record jump in pessimism about the global economy, with nearly one in three of the leaders projecting a decline in growth.
Just last year, the same survey was decidedly more optimistic, with only 5 percent predicting slower growth, according to the PwC Annual Global CEO Survey. The consulting firm released the survey results in conjunction with the annual World Economic Forum in Davos, Switzerland.

“If CEOs’ confidence continues to be a leading indicator, global economic growth will slow down in 2019,” PwC said of the survey.

Majority Of CEOs Still Anticipate Growth 

The 29 percent of CEOs who said they expect growth to slow is the highest percentage since 2012, when nearly half the CEOs surveyed said the economy would continue to see slower growth amid the lingering effects of the recession.

Despite the shocking jump in pessimism in 2019, the percentage of CEOs still predicting increasing growth remains higher than that of leaders expecting a slowdown.

Forty-two percent of the CEOs said they expect economic growth to improve this year. And while that’s down from a particularly exuberant 2018 — when 57 percent of CEOs predicted increased growth — it’s still much higher than the 29 percent who were predicting increased growth as recently as 2017.

Another 28 percent in this year’s survey said they expect the level of economic growth will remain about the same.

'A General Theme Of Hunkering Down' 

The report not only found broader pessimism about the world’s economic situation, but also a notable drop in confidence about the short- and medium-term revenue pictures at the CEOs' own organizations. 

Responses were influenced heavily by the politics of what seems to be a wave of populism moving around the world, from the rise of President Donald Trump in the United States to Brexit in the United Kingdom to anti-immigrant sentiment and populist political success on the European continent, according to PwC. 

"Across the survey rang a general theme of hunkering down as CEOs adapt to the strong nationalist and populist sentiment sweeping the globe,” the consulting firm said. 

CEOs expressed strong concerns over what they perceive as the rising difficulty of conducting business, driven by trade conflicts, uncertainty and overregulation, among other worries.

The release of the survey at Davos coincided with a letter that was written by billionaire investor Seth A. Klarman that was spurring lots of discussion at the forum, even though Klarman did not attend. The letter warns of rising global tensions and debt — and shrinking American leadership.

If there is an upside to be found in the PwC results, it may be that the situation could change dramatically and quickly, as is evidenced by how much it did so this year. Last year’s survey results were just the opposite, finding a record jump in optimism.

The percentage of CEOs predicting slower growth jumped in every region of the world, PwC said. The highest percentage of pessimists was found in the Middle East, where 38 percent said they expect a slowdown. The least pessimistic part of the world is Africa, where only 25 percent of CEOs see a slowdown.

But the most optimistic region? That would be the Asia-Pacific region, where 50 percent of CEOs expect world economic growth to improve, compared to 28 percent of CEOs in the area who expect growth to decline.

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