Cybercrime rises up list of concerns
CEOs confident despite growing global pressures
Optimism remains high in spite of these pressures, according to PwC’s 19th Annual Global CEO Survey published at the World Economic Forum in Davos.
The survey of more than 1,400 global leaders, including reveals that 84% of 104 UK CEOs are confident in their company’s prospects for the year ahead, and a third are very confident. This level of confidence is slightly down on last year, where 85% were confident, although 39% were very confident.
While UK CEOs remain confident in their own businesses’ prospects, there are growing concerns about the global economy and the number of threats their businesses face. Three in 10 think the global economy will improve this year, down from 41% last year, and the number who think it will decline has risen to nearly a quarter (23%), from 18% last year and none in 2013.
More than half of UK business leaders see more threats to their business today than three years ago. Over-regulation remains the top perceived threat for the third year in a row (82%), but geopolitical uncertainty has risen to become the second biggest concern, cited by 80% of UK respondents.
Cyber security is another growing focus area and is now considered the third greatest threat, with 74% of CEOs saying they are concerned. UK CEOs are more alert to the threat of cyber-attacks than most of their global counterparts (global average 61%). CEOs in the US are most concerned, with 88% citing it as a threat to their organisation’s growth.
CEOs of UK companies are also planning more M&A activity in the next year than any of their European peers – 64% plan to complete a domestic or cross-border deal, compared to 58% last year. The UK’s attractiveness as a place to invest also remains high, with the UK ranked as the fourth most important country for growth for global respondents, behind only the US, China and Germany.
Just over half (56%) said that the speed of technological change is a threat to their growth prospects, down from 59% last year and below the global figure of 61%. Accordingly, 95% of UK CEOs plan to make changes to how their organisations use technology as they embrace the digital revolution and plan for future success.
Lindsay Gardiner, regional chairman, PwC in Scotland, said: “Despite ongoing global economic and geopolitical concerns such as over-regulation, fiscal austerity and the combination of a second year of low oil prices – now hovering at around $30 a barrel – and oversupply in the market, many UK business leaders remain confident about their prospects in the year ahead.
“Focusing in on just one of these factors, however, reveals the divergent impact it can have on industries. While Scotland’s oil and gas firms continue to navigate the maelstrom caused by the sustained, low oil price, focusing heavily on cash, cost reduction and innovation, other key industries such as chemicals, manufacturing, tourism and retail are benefitting from the combination of increasing consumer demands and lower energy and raw material costs.
“Overall, our UK CEOs remain resolute in their longer-term ambitions, driving through investment plans which include creating new jobs as well as developing their workforce. With almost two-thirds also planning to expand via a merger of acquisition, this steadfast approach should position UK companies well in the future.”