The 2018 PricewaterhouseCoopers CEO survey found respondents optimistic about economic growth, but less certain of long-term prospects and increasingly wary of a fractured society.

By Daniel Herborn

Posted on January 23, 2018

Released on the eve of the World Economic Forum, PwC’s 21st annual report is based on 1,293 interviews with CEOs across 85 countries and weighted by national GDP.

Here are some of the key takeaways from this year’s report:

1. CEOs are optimistic for global growth in 2018

The report found that 57% of the CEOs surveyed believe global economic growth will improve over the next 12 months.

This optimism comes on the back of 2017 economic results, which are expected to show the strongest growth since 2010.

It’s the first time since the survey was established in 2012 that the majority of CEOs involved predicted improvement.

In last year’s survey, only 29% of CEO respondents thought the global economy would experience growth.

The sharpest rise in optimism was seen in North America, with 63% of CEOs saying they believe that global economic growth will improve over the next year.

This outlook follows the International Monetary Fund (IMF) upgrading its forecast for global growth. The IMF now expects the global economy to expand by 3.9% in 2018. It also predicts 2.7% growth in the US this year.

2. CEOs are generally confident about their own company’s growth prospects

Despite reports of widespread political uncertainty, the survey revealed confidence among CEOs for the performance of their own companies over the coming year.

While not as pronounced as optimism on a global level, 42% of CEOs polled said they were ‘very confident’ about their company’s prospects for short-term revenue growth.

Positivity was highest in North America (53%) – the only region where a majority of CEOs were ‘very confident’ about their own short-term growth.

Latin America, Central and Eastern Europe and Asia-Pacific CEOs all reported higher confidence on this question than they did last year.

Expert opinion on whether this level of optimism is justified was divided.

Glenn Hubbard, Dean of Columbia Business School, told the report: “We are in a cyclical recovery that has been going on for many years since the financial crisis.

“I think in most parts of the world, CEOs believe the changes in policy are going to continue to improve growth.”

Other economists, however, preached caution. Carlota Perez asked: “Is this a real recovery or just a short-term blip?

“I hope leaders don’t believe this recovery is permanent”, Perez concluded.

3. CEOs are more confident about the short-term than the long-term

Surveyed on how confident they were about their company’s prospects for revenue growth over the next three years, 45% of respondents were ‘very confident’.

In last year’s survey, 51% were ‘very confident’.

Long-term confidence was particularly low in the Middle East (only 33% of respondents were ‘very confident’), and Central & Eastern Europe (26%).

The report noted that CEOs taking part in the survey had generally reported more confidence for the three-year forecast than for the coming year.

The last time more CEOs reported they were ‘somewhat confident’ than ‘very confident’ about long-term revenue growth was in 2009, when confidence levels plummeted in the wake of the global financial crisis.

4. CEOs are worried about different threats in each region

In each economic region, the CEOs surveyed returned diverse results when asked what they saw as the biggest threat to their organisation’s economic growth.

Globally, the threat that troubled the most CEOs was over-regulation – 42% of respondents reported they were ‘extremely concerned’.

Terrorism (41%) and geopolitical uncertainty (40%) were also major sources of worry.

Terrorism rose sharply, climbing from 12th place last year to 2nd in 2018.

CEOs were also far more likely to be concerned about cyber threats – 40% reported the highest level of concern about the issue, up on 24% from last year.

The report concluded that these findings show, “CEOs across the world are increasingly anxious about broader societal threats. The threats that trouble CEOs are increasingly existential.”

35% of CEOs reported extreme concern about populism, which was not ranked among the top 15 concerns last year. This concern seems connected to the rise of Trump and Brexit, with both phenomena seen as part of a trend towards populism.

One positive trend from this question was the lower number of CEOs ‘extremely concerned’ about uncertain economic growth. Only 26% reported anxiety about this issue, down from 34% the previous year.

5. CEOs see navigating an increasingly divided world as an ongoing challenge

The report found a striking trend towards CEOs seeing the world as divided along geopolitical and economic lines.

82% believed the world is moving towards ‘Multiple belief and value systems’, with only 16% predicting a trend to ‘Common belief and value systems’.

Only 23% of CEOs saw a trend towards a global marketplace, with more than three-quarters believing a move towards regionalism is more likely.

Global Chairman of PwC, Bob Moritz, said: “CEOs tell us the world is edging away from its full-on embrace of a singular and seamless ecosystem and instead moving toward multiple fragmented ecosystems.”