Some 73% of CEOs think global growth will decline in the next year, according to a survey by audit firm PwC, confirming the most pessimistic outlook by business leaders for 12 years.
But this isn’t a repeat of the economic crash of 2008 and 2009, PwC Chairman Bob Moritz told CNBC from the World Economic Forum in Davos, Switzerland, Tuesday.
“The difference is then no one saw it coming and no one could figure out how long it would last,” Moritz said. Today CEOs are “much more confident in their own abilities to manage their way through this stuff,” he added.
The global economy is the biggest concern for CEOs, with confidence in the international climate having plummeted in the last year.
In the U.K. for example, only 21% of CEOs expect the global economy to improve in the next 12 months, according to the new PwC survey published late Monday, down from 82% of the business leaders in last year’s survey.
PwC’s 26th annual survey was made up of 4,410 CEOs across 105 countries, and showed that almost 40% believe that their business will not be economically viable within a decade on current trajectories.
In the U.K., 22% of CEOs think that their businesses will not be economically viable without significant changes.
“It is a combination of issues, all of which the CEOs know. This is not new information for them,” Moritz said.
And while many employers will be looking to cut costs as the global economy slows down, 60% of the CEOs surveyed said they won’t be reducing their headcount, according to Moritz.
“Has the power relevant to employer mobility gone back to the employers in a slowing economy? Those with skills? The answer is no,” he said, highlighting that employers will need to find cost savings so that they can provide good wages, benefits and upskilling for employees.
EY chairman: CEOs doing ‘pretty darn well’
The chairman of rival Big Four consultancy EY, Carmine Di Sibio, said he expects the economy to go through “some tough times” in the next six to nine months, but was complimentary when it came to business leaders.
″[CEOs are] doing pretty darn well,” Sibio said on Tuesday at Davos, as he mentioned the 17 restructuring projects EY currently has underway in the U.S. among others in Europe.
The long-term issue companies are currently grappling with is one of “demographics,” according to Di Sibio, as the U.S. and Europe “need more workers, plain and simple,” he added.
The EY chair also alluded to recent layoffs in the tech sector, but highlighted that while those companies have announced redundancies, they’ve hired many more people in the last couple of years.
“Are they doing this to send a message to the Fed in the U.S.? Or are they really doing it to downscale?,” he asked.
Source: CNBC
Image: WEF
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