The Davos man is a lot more confident than he was a year ago. At the same time, concerns about protectionism are growing.
Of CEOs around the world, 52% believe the global economy will be better in 2017, according to a new study from PricewaterhouseCoopers. That’s way up from just 27% who were optimistic about economic improvement a year ago. And confidence grew in areas around the world that you wouldn’t suspect.
For instance, the Brexit vote doesn’t seem to have sapped the confidence of UK CEOs. Just over 40% of them that responded to the survey, which was concluded in December, said they thought revenue would grow at their businesses. That was up from 33% the year before.
“We don’t expect to see the impacts of Brexit for a while,” says PWC’s chairman Bob Moritz. “And we saw that in the CEO responses.”
Confidence was a little more muted for U.S. CEOs, but still up. In the U.S., 39% of CEOs said they expected revenues to rise at their businesses. That was up from 33% a year ago. But it was down from 46% in 2015. The hiring expectations were even stronger. Of U.S. CEOs, 54% said they expected to increase their headcount over the next 12 months. Of note, the survey was concluded after Donald Trump won the election.
The accounting and consulting firm released the survey, which PWC has done for 20 years, of more than 1,300 top executives on the first official night of the World Economic Forum, the global confab held each year in Switzerland.
The survey does seem to be very sensitive to market movements. Last year, PWC noted that the pessimistic number followed a few months of shocks in the market. The same could be said of this year’s more positive numbers. U.S. stock markets have risen sharply since Trump’s election.
In fact, you would expect U.S. CEOs to be even more confident given that. Holding back confidence, though, appears to be concerns about new trade restrictions that the new Trump administration could impose. Nearly 60% of CEOs around the world said they were worried that new restrictions on trade might hold back their businesses.
Globalism and whether free trade has been a source for good is always a big topic of discussion among the CEOs and other world leaders who attend Davos this year. Predominantly, attendees at the Davos conference have been for open boarders. But the election of Donald Trump, who has talked tough on trade, and Brexit has amped up the debate around the issue at the global confab.
The PWC survey found a wide gap between CEOs and the general public on the issue. Just 38% of the public think that globalism has been a good thing. That compares to 60% for CEOs, according to the PWC survey.
“There’s a lot at stake if we do not achieve inclusive global growth,” says PWC’s Moritz.