- A PwC survey of more than 5,000 CEOs globally reveals record levels of 
optimism 
- 76% of CEOs believe global economic growth will improve in 2021 
- Confidence in companies' own revenue growth rebounds 
- The US extends its lead over China as the top growth destination in the eyes 
of CEOs 
- In the year of COP26, climate change is still not being approached with 
urgency 
- Misinformation has risen to become a top 10 threat to growth

One year after COVID-19 was declared a pandemic, CEOs are voicing record levels 
of optimism in the global economic recovery, with 76% of global business 
leaders predicting that economic growth will improve in 2021. 

The figures come from PwC's 24th Annual Global CEO Survey, which this year 
polled 5,050 CEOs in 100 countries and territories over January and February 
2021.

The percentage of CEOs expressing confidence in growth is up from 22% in 2020 
and 42% in 2019, representing the highest level of optimism since the survey 
started asking this question in 2012. 

Optimism among CEOs over global economic growth is particularly strong in North 
America and Western Europe, with 86% and 76% of CEOs, respectively, from these 
regions predicting improved global growth in the year ahead.

"After a year of human tragedy and extensive economic hardship, it is 
encouraging to see that the people responsible for making investment decisions 
and hiring staff are feeling cautiously optimistic about the year ahead. CEOs 
have faith that growth will return, boosted by the rapid development of 
vaccines and their rollout in many parts of the world," said Bob Moritz, 
Chairman of the PwC Network.  

"During the tumultuous past year, CEOs have had to rethink and reconfigure what 
they do and how they do it, while dealing with stretched balance sheets and 
supporting employees who have been forced to navigate these extraordinary 
circumstances. 

"CEOs now face two fundamental challenges: first, how to build trust with a 
broad range of stakeholders, whose expectations of business are higher than 
ever before; and second, how to adapt their businesses and deliver sustained 
outcomes in a rapidly changing external environment. Organisations that get 
this right will be best placed to come out of the pandemic as strong, resilient 
and productive businesses, able to withstand future shocks."

CEO confidence in revenue growth rebounds to the long-term average

CEOs are more optimistic about the outlook for their businesses. Some 36% of 
those polled said they are "very confident" about their organisation's 
prospects for revenue growth over the next 12 months, up from 27% of CEOs in 
2020. 

While global confidence is up, there is wide variation across industries, 
reflecting the varying degrees to which consumer behaviour has been impacted by 
the pandemic. CEOs in the technology and telecommunications sectors show the 
highest levels of confidence at 45% and 43%, respectively. Meanwhile, CEOs in 
the transportation and logistics (29%) and hospitality and leisure (27%) 
sectors are among the least confident about their ability to grow revenues over 
the next 12 months. 

US extends its lead over China as the top destination for growth

The survey findings show that the US has extended its lead as the number one 
market that CEOs are looking to for growth over the next 12 months at 35%, 
seven percentage points ahead of China at 28%. In 2020, the US was only one 
percentage point ahead of China. 

New political developments and existing tensions have had an impact on the 
views of US CEOs. They are reducing their emphasis on China as a growth driver 
and increasing their focus on Canada and Mexico; compared to 2020, US CEOs' 
interest in the latter two countries rose by 78%. Meanwhile, China CEOs report 
growing interest in large economies such as the US, Germany and Japan -- prime 
destinations for exports.

At 17%, Germany holds on to its number three spot on the list of growth 
destinations, while the UK, post-Brexit, moves up to number four (11%), 
surpassing India (8%). Japan also rises up the ranking to become the sixth most 
attractive growth destination, overtaking Australia which held that position 
last year.

In the year of COP26, climate change is not being approached with urgency

The percentage of CEOs expressing concerns about climate change has risen from 
24% in 2020 to 30% in 2021. This represents only a marginal increase in the 
context of COP26, which is being held this year in Glasgow, UK. The finding 
also comes in the context of rising anxiety about nearly all types of threats. 
Climate change still only ranks ninth among CEOs' perceived threats to growth. 
Furthermore, another 27% of CEOs report being "not concerned at all" or "not 
very concerned" about climate change. This may be because climate change is not 
seen as an immediate threat to growth compared to other issues such as the 
pandemic, over-regulation and cyber threats.

Meanwhile, 39% of the CEOs polled believe their organisation needs to do more 
to 'measure' their environmental impact. And 43% believe their organisation 
needs to do more to 'report' on it, a greater share than any other disclosure 
area. This is encouraging as more and better corporate information on 
environmental impact is key to driving the change needed to get to a net zero 
economy.

However, 60% of CEOs have not yet factored climate risks into their strategic 
risk management activities, which is concerning as climate change poses 
increasing physical and transitional risk for business. At a country level, 
CEOs in countries with high exposure to natural hazards such as India and China 
are some of the least prepared for climate change risk. 

While 23% of CEOs plan to significantly increase investments in sustainability 
initiatives as a result of COVID-19, almost one third of CEOs are planning no 
change at all.

Bob Moritz said: "To address the biggest challenges facing our world today, we 
need to change the incentives that drive decision-making. This requires the 
financial markets taking a broader view of value, beyond solely financial 
return and short-term value, so capital will flow to the right places. Better 
and comparable non-financial corporate reporting is crucial too, so 
stakeholders can see how companies are creating value for society and our 
planet, as well as meeting their financial objectives. Companies that get this 
right will enhance their brand and build trust with their stakeholders."

Worries about cyber, tax policies and misinformation on the rise

Not surprisingly, pandemics and health crises[1] top the list of threats to 
growth prospects, overtaking the fear of over-regulation, which has been the 
perennial number one concern for CEOs globally since 2014. 

Rising digitisation is increasing the risks posed by cyber threats. This, 
coupled with the significant increase in cybersecurity incidents in 2020 
including ransomware attacks, has resulted in cyber threats leaping up the list 
to become the number two concern, cited by 47% of CEOs compared to 33% in 2020. 
Cyber threats are a concern particularly for CEOs in North America and Western 
Europe, where they are considered a greater threat than the pandemic. 

Also rising rapidly up the list of CEO concerns is the spread of misinformation 
(28%, up from 16% in 2020), which has had an impact on elections, reputation, 
and public health – further contributing to a decline in trust across society.
In 2020, tax policy uncertainty ranked outside the top ten concerns for CEOs, 
with only 19% of CEOs concerned. This year, it has increased rapidly in 
importance, leaping up to seventh place (31%), with CEOs undoubtedly watching 
government debts accumulate and realising that business taxes will likely need 
to rise.

Digital investments for the future

Asked about their spending on digital transformation, nearly half of CEOs (49%) 
project increases of 10% or more. Despite the rising level of concern CEOs are 
voicing about cyberattacks, this has not translated into definitive actions. 
Less than half of the CEOs planning for heightened digital investment are also 
planning to boost their spending on cybersecurity and data privacy by 10% or 
more.

At the same time, a growing number of CEOs – 36% – plan to use automation and 
technology to make their workforce more competitive, more than double the share 
of CEOs who said the same in 2016. 

Bob Moritz added: "At the pandemic's one year mark, we're at an inflection 
point as vaccination begins to ramp up around the world. Although the shape of 
the recovery remains unknown, it is clear that we cannot simply go back to the 
way things were before. To achieve the kind of change that's needed, CEOs will 
need to think differently and constantly evaluate their decisions and actions 
against broader societal impacts. In doing so, they'll set a course that builds 
trust and delivers sustained outcomes for shareholders, society and our planet."

Notes:
Download the report at http://ceosurvey.pwc/ 

PwC surveyed 5,050 CEOs in 100 countries and territories in January and 
February 2021. This is up from 3,501 respondents in last year's survey. The 
global and regional figures in this report are based on a sub-sample of 1,779 
CEOs, proportionate to country nominal GDP to ensure that CEOs' views are 
representative across all major regions. Further details by region, country and 
industry are available on request. 

Of the 1,779 CEOs whose responses were used for the global and regional figures:

- 6% of their organisations had revenues of US$25bn or more 
- 9% of their organisations had revenues between US$10bn and US$25bn. 
- 35% of their organisations had revenues between US$1bn and US$10bn. 
- 34% of their organisations had revenues between US$100m and US$1bn. 
- 14% of their organisations had revenues of up to US$100m. 
- 60% of their organisations were privately owned.

We also conducted in-depth, face-to-face interviews with CEOs from six regions. 
Some of these interviews are quoted in this report, and more extensive 
transcripts can be found on our website at 
https://www.strategy-business.com/inside-the-mind-of-the-ceo.

About PwC
At PwC, our purpose is to build trust in society and solve important problems.  
We're a network of firms in 155 countries with over 284,000 people who are 
committed to delivering quality in assurance, advisory and tax services. Find 
out more and tell us what matters to you by visiting us at www.pwc.com. 

PwC refers to the PwC network and/or one or more of its member firms, each of 
which is a separate legal entity. Please see www.pwc.com/structure for further 
details.

(C) 2021 PwC. All rights reserved.

[1] New risk category this year: was last included in the survey in 2015

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Source: PwC