More than three quarters of Canadian CEOs (76%) believe that global economic growth will decline over the next 12 months, according to PwC’s 26th Annual Global CEO Survey, which polled 4,410 CEOs in 105 countries and territories in October and November 2022. This bleak outlook is the most pessimistic CEOs have been regarding global economic growth in over a decade, and is a significant departure from the optimistic outlooks of previous years where a majority of the CEOs had thought economic growth would improve.
The survey focused on critical issues the world’s business leaders are facing, and how they can balance the dual imperative of reinventing their businesses to succeed in a changing world while managing short-term pressures and challenges.
“CEOs have endured a lengthy period of crisis and threats that have impacted last year’s optimism. With inflation at levels that have not been seen in decades, macroeconomic volatility, and geopolitical tensions to name a few factors, it’s no surprise that CEOs are predicting a decline in global growth over the next 12 months,” said Nicolas Marcoux, CEO PwC Canada. “In order to get beyond the short-term challenges, and excel in the longer-term, strategic transformation is going to be critical.”
A significant number of both global CEOs (39%) and Canadian respondents (25%) believe that their company will no longer be economically viable a decade from now, if they continue on their current path. The result is a race for CEOs to reinvent their businesses, which many are planning to pursue through further investments in digital transformation initiatives like automation of processes and systems and deploying cloud, artificial intelligence and other advanced technologies.
Cybersecurity and data privacy are also high on the radar with almost half of the Canadian CEOs (49%) planning investments in supply chain resilience to mitigate exposure to geopolitical conflict in the next 12 months. A collaborative approach from the top is vital, given that a critical aspect of cybersecurity improvements is through executive collaboration.
The CEOs’ race against time is especially urgent when it comes to climate change. Our survey shows that there is significant work to do on key actions like cutting carbon emissions, with almost half (49%) of Canadian CEOs not looking to reduce emissions or having yet to move forward with their plans to do so.
Relatively few CEOs are considering hiring freezes and other actions negatively impacting the workforce this year. Only 18% of Canadian CEOs (24% globally) are considering hiring freezes in the next 12 months to mitigate against economic challenges and volatility. A vast majority – 85% – indicate they do not plan to reduce staff remuneration in order to retain talent and mitigate workforce attrition rates, and 70% plan to focus on upskilling their workforce.
Finding the right balance for CEOs as they take on this dual imperative is crucial. CEOs need to find time, capacity and resources to balance investments in reinventing the business while managing their day-to-day challenges and needs. CEOs themselves say they are spending too much time on operational performance issues than investing in their businesses to evolve for the future.
Nicolas Marcoux, CEO, PwC Canada concludes: “Striking the right balance may be challenging, but CEOs in Canada have demonstrated their resilience and an incredible ability to pivot these past few years. By staying focused on building trust and generating long-term value for their people, their clients and society, business leaders can position themselves strongly to mitigate the risk of a potential economic downturn.”