CEOs in South Africa are less confident than their global counterparts regarding their growth prospects in 2018, according to PwC’s 21st survey of 1,293 chief executives around the world.
Globally, the majority of CEOs are optimistic about the economic environment amid geopolitical uncertainty, corporate misconduct and the impact of artificial intelligence on the future job market, the financial services firm said.
Fifty-seven percent of global business leaders say they believe global economic growth will improve in the next 12 months. This percentage is almost twice the level of last year (29%) and the largest ever increase since PwC began asking about global growth in 2012.
Only 22% of CEOs in South Africa however, are “very confident” of their company’s own growth in the next 12 months – 20 points below the global average (42%).
However, South African CEOs – 37%, compared to 45% globally – are slightly more confident about their own company’s prospects for revenue growth over the next three years.
In addition, 37% of South African CEOs also expect global economic growth to improve in the next 12 months – 20 points below the global average.
Dion Shango, CEO of PwC Southern Africa, said: “CEOs’ optimism in South Africa is more tempered than that of the developed economies, especially regarding their own organisations’ prospects for revenue growth. The state of the economy, unemployment and political uncertainty, among other issues, are casting a shadow over business expectations.”
The global survey results, based on interviews with almost 1,300 CEOs from 85 countries. In South Africa 41 CEOs from a broad spectrum of listed and privately-owned companies participated in our online survey.
Threats to growth: CEOs fear wider societal threats they can’t control
CEOs across the world are increasingly concerned about broader societal threats – such as geopolitical uncertainty, terrorism, the rise of populism, and climate change – in addition to direct business risks such as cyber threats and the speed of technological change.
South African CEOs’ concerns around a broad range of business, societal and economic threats have risen.
They are “extremely concerned” about the following:
- Social instability (South Africa: 98% vs Global: 73%)
- Over-regulation (South Africa: 93% vs Global: 83%)
- Unemployment (South Africa: 93% vs Global: 50%)
- Uncertain economic growth (South Africa: 93% vs Global 74%)
- Exchange rate volatility (South Africa: 90% vs Global: 70%)
- Populism (South Africa: 88% vs Global: 77%).
Of business threats, 37% of South Africa CEOs (compared to 38% globally) said they were “extremely concerned” about the availability of key skills, 41% (compared to 40% globally) cited cyber threats, and 32% (compared to 38% globally) stated the speed of technological change as concerns.
It is notable that 22% of South African CEOs (compared to 14% globally) stated that they are “extremely concerned” about potential ethical scandals.
This comes in the wake of a growing number of firms that have suffered reputational damage in the past year because of ethical lapses, PwC noted.
In addition, 39% of South African CEOs (global: 32%) believe that changes in core technologies of production or service provision, such as artificial intelligence, will be very disruptive for their business over the next five years.
A fifth of South African CEOs (20%), compared to 23% globally, think that changes in industry regulation will also be very disruptive to businesses over the next five years, PwC said.