Confidence in the global business environment has fallen sharply among business leaders, according to the latest PwC annual global CEO survey.
The annual survey of more than 1400 business leaders launched on Tuesday evening in Davos found that only 35 per cent of chief executives are confident of their business' growth in the coming year, down from 39 per cent last year. Overall, 27 per cent of business leaders believe global growth will improve over the next 12 months, a decline of 10 points on last year.
Concerns about the health of the Chinese economy, falling oil prices and geopolitical security risks are the main factors weighing on sentiment, the research found.
Despite the European and US economy emerging from the recent global financial crisis, two thirds of chief executives believe more threats face their businesses than three years ago.
The PwC CEO survey is the latest indicator of falling confidence in the global economy as leaders of the business and political community gather for the World Economic Forum in Davos.
Earlier on Tuesday the IMF cut its global growth forecast for 2016 in an updated global economic outlook, while figures from China showed that Chinese GDP growth slowed to 6.8 per cent in the fourth quarter of 2015, the lowest growth in a quarter of a century.
Launching the report in Davos, PwC's global chairman Dennis Nally said that there was no question that the confidence of business leaders in both their own businesses and the global economy had taken a knock, noting that the economic risks were becoming "more complex".
“No matter what the business size, the threats it faces are becoming more complex, crossing the borders of geopolitics, regulation, cyber security, societal development, people, and reputation,” he said. “There is a new spectrum of risk for CEOs that represents threats to both national and commercial interests.”
Despite its pessimistic findings, the report did highlight regional differences. The level of optimism among North American chief executives was just 16 per cent – half of that recorded in Western Europe.
While Ireland was not included in the global report, PwC Irish managing partner, Feargal O’Rourke, said that Irish business leaders were more bullish about the economic future, pointing out that a PwC survey in November had shown that 92 per cent of Irish business leaders were confident about the Irish economy, and 88 per cent about their own businesses.
“What we found is that while there are many overlaps with the global survey in terms of the main perceived risks to economic growth, Irish business leaders are more confident about the economy. In part this reflects the fact that Ireland is experiencing economic growth that is three times the European average, but it also reflects that Ireland was emerging from a particularly difficult economic period.”
