Record rise in CEO confidence in global economy

Optimism in global growth has soared, but some CEOs are extremely concerned about digital skill shortages. Where are these shortages. What are PwC’s recommendations for a digitally-enabled workforce?

CEO optimism increasing - photo of digital globe with financial markets graph
A record number of chief executives across the world are optimistic about the global economic prospects in the immediate future, according to a survey released at the start of the World Economic Forum annual meeting in Davos on Tuesday.The PwC survey of almost 1,300 CEOs in 85 countries found that 57 per cent believed global economic growth would improve over the coming 12 months - up from 29 per cent a year and the largest increase since PwC first posed the question in 2012.More than half the business leaders also said they expected their company staffing levels to increase over the year, although there were fears in many countries over the possible effects on growth of terrorism, geopolitical divisions, global warming and cyber attacks.

Global growth optimism despite Trump's election

The survey found that optimism in global growth had soared in the US to 59 per cent from a low of 24 per cent last year when there was uncertainty following Donald Trump's election. Even among the traditionally less optimistic countries, such as Japan and the UK, confidence in the immediate prospects for growth has more than doubled since this time last year.Bob Moritz, global chairman of PwC, commented: "CEOs' optimism in the global economy is driven by the economic indicators being so strong. With the stock markets booming and GDP predicted to grow in most major markets around the world, it's no surprise CEOs are so bullish."It was a more mixed picture, however, when it came to chief executives' confidence in their own organisation's growth prospects with only 42 per cent 'very confident' of global growth feeding through to their own company's fortunes.
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UK economic confidence levels drop due to Brexit fears

Such confidence had grown most in countries such as Australia, China and the US, while in the UK confidence levels dropped because of the uncertainty surrounding Brexit negotiations.PwC reported: "The top three most confident sectors for their own 12-month prospects this year are technology (48 per cent 'very confident'), business services (46 per cent) and pharmaceutical and life sciences (46 per cent) - all exceeding the global 'very confident' level of 42 per cent."Strategies for growth remain largely unchanged on last year's survey - CEOs will rely on organic growth (79 per cent), cost reduction (62 per cent), strategic alliances (49 per cent) and M&As (42 per cent). There was a small increase in interest in partnering with entrepreneurs and start-ups (33 per cent against 28 per cent last year)."

CEOs expect most growth in US markets

When the CEOs were asked in which markets they expected to see most growth over the coming year, the US emerged in No 1 position with 46 per cent expressing confidence, ahead of 33 per cent opting for China. Germany was in third place and the UK in fourth, while India overtook Japan to claim fifth spot."Even with high levels of global growth confidence, business leaders want and need safe harbours for investment to secure short-term growth," said Mr Moritz. "Access to consumers, skills, finance and a supportive regulatory environment are reinforcing leading markets' positions, for business leaders to achieve their short-term growth targets."

More than 50% of CEOs expect job prospects to improve

On jobs, 54 per cent said they expected to increase head counts over the coming 12 months, with only 18 per cent predicting a decrease. The sectors most confident of increasing staff numbers were healthcare (71 per cent), technology (70 per cent), business services (67 per cent), communications (60 per cent), and hospitality and leisure (59 per cent).

Fears for digital skill shortages

However, more than a quarter of CEOs admitted to being 'extremely concerned' over the availability of digital skills, with shortages most evident in Brazil, China and South Africa."Investments in modern working environments, learning and development programmes, and partnering with other providers are the top strategies to help them attract and develop the digital talent they need," said PwC."While recent research by PwC showed that workers were optimistic about technology improving their job prospects, CEOs admit that helping employees re-train, and increasing transparency on how automation and AI could impact jobs, is becoming a more important issue for them.

Companies must encourage training opportunities

Mr Moritz added: "Our education systems need to arm a global workforce with the right skills to succeed. Governments, communities, and businesses need to truly partner to match talent with opportunity, and that means pioneering new approaches to educating students and training workers in the fields that will matter in a technology-enabled job market."It also means encouraging and creating opportunities for the workforce to re-train and learn new skills throughout their careers. As the interest in apprenticeships and internships shows, lifelong training relevant to a business or industry is critical."
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