Are world markets hearing the warning cry from CEOs gathered atop the snow-capped mountains in Davos, Switzerland? With the slide in markets again today, they just may be.
A new survey released at the 2016 World Economic Forum in Davos, Switzerland, shows that CEO confidence in the global economy has taken a dive, down by 10 points from the previous year. Confidence in revenue growth for their own companies over the next 12 months has also fallen.
Only about a third of the 1,400 CEOs surveyed in PwC’s 19th Annual Global CEO Survey say they are very confident in their own company's growth in the coming year, with U.S. CEOs growing especially concerned. “Last year the U.S. was seen as a beacon in terms of CEO confidence, which is measured by their ability to raise revenues in the next 12 months. That’s down actually about 12%. So 46% of them last year felt good about the ability to raise revenues. That dropped to about 33% this year,” says PwC U.S. Chairman Bob Moritz. “It’s a combination of factors, first the combination of the economic environment as you look broadly. The U.S. is too connected to not be negatively impacted by that,” says Moritz.
Moritz also notes that this pessimistic outlook was expressed before new concerns over China’s economy, the drop in world oil markets, and recent steep declines in world stock markets.
China’s economic concerns, the drop in crude oil prices, and geopolitical uncertainty are all taking a toll on confidence in global economic growth, yet over-regulation continues to be cited as the biggest threat to revenue growth by CEOs. “U.S. CEOs have, for the last three or four years, had regulation as the number one business risk issue. It's costing them a lot of money, getting in the way of what they want to do and how they want to invest,” says Moritz.