The World Economic Forum (WEF) in Davos, Switzerland, typically brings together business leaders from around the world to discuss the global economy and the challenges facing their industries. However, this year’s WEF may be less upbeat than normal as CEOs consume costly sustainably farmed fish and fresh Davos spring water.
According to a recent survey conducted by PwC, 73% of CEOs predict a slowdown in global economic growth over the next 12 months, marking the most pessimistic outlook for global economic growth since the question was first asked 12 years ago.
The PwC global CEO study surveyed 4,410 CEOs across 105 countries and territories in October and November 2022. In contrast to the optimistic predictions of 2021 and 2022, when 76% and 77% respectively believed that economic growth would improve, the current outlook is significantly more gloomy. As far as threats to enterprises go, inflation, macroeconomic instability, and geopolitical war placed first through third. In the survey, nearly 40% of CEOs said they didn’t think their companies would still be profitable in ten years if they didn’t change.
The risks affecting businesses, individuals, and the environment will only increase, according to PwC Global Chairman Bob Moritz. “The world continues to change at a relentless pace” he added. Businesses that don’t transform won’t be viable, so if companies are to not just thrive but survive the next years, they must carefully balance the dual imperative of minimizing short-term risks and operational needs with long-term goals.
The survey’s one encouraging finding was that CEOs claimed they did not intend to make significant layoffs. Roughly 60% of respondents said they had no plans to cut staff, and 80% said they had no such plans despite a persistent struggle to retain talent.
At a time when stock market investors are still feeling the effects of the 2022 bear market and recession fears are on the rise due to rising interest rates, the WEF CEOs’ mood is anything from positive. Recent large layoffs from well-known brands in technology, like Salesforce, Amazon, Meta, and others, have been brought on by sluggish economic development and an uncertain demand picture.
Overall, the WEF CEOs’ outlook is a reflection of the current state of the global economy and the challenges facing businesses. With inflation, macroeconomic instability, and geopolitical war at the forefront of their concerns, it’s clear that these leaders are focused on the risks facing their companies and the need to adapt to an ever-changing world. While the survey’s one encouraging finding is that CEOs do not intend to make significant layoffs, the overall mood at the WEF is cautious as business leaders navigate the uncertainty and challenges of the current economic climate.