What are the key issues for UK CEOs in 2017?
UK CEOs have less confidence in the global economy than they did a year ago, according to PwC.
The annual PwC CEO Survey, now in it's 20th year and launched at the World Economic Forum yesterday, has revealed that UK CEOs are concerned about uncertain economic growth, over-regulation and skills shortages.
Just 17% of UK CEOs expect global economic growth to improve over the next 12 months, down from 30% last year, and well below the global figure of 29% who think it will improve.
However, almost nine out of 10 (89%) UK CEOs say they are confident of their own company’s growth in the year ahead, an improvement on the 2016 results and above the 85% global figure. A further 95% are confident about their prospects over the next three years.
Kevin Ellis, Chairman and Senior Partner of PwC, commented: “Despite an eventful 2016, it’s encouraging to see growth firmly on the agenda of UK plc.
"We may face a period of uncertainty, but the economic fundamentals remain positive and businesses should keep calm and carry on doing what they do best – capitalising on the UK’s strengths and attractiveness to the rest of the world, and seeking out new opportunities.
"UK CEOs are resilient and realistic about the challenges ahead - maintaining a positive mindset and staying focused on what they can control is vital."
Brexit has had a significant effect on the risk agenda of UK CEOs. Over-regulation, which they ranked as their top economic threat last year, has moved to a lower priority, and is now level with geopolitical uncertainty at 74%. Yet at a global level, over-regulation remains the second-biggest economic threat, cited by 80% of all CEOs worldwide.
Global CEO survey key issues 2017
|Somewhat concerned||Extremely concerned|
|Increasing tax burden||39%||29%|
|Access to affordable capital||27%||15%|
|Uncertain economic growth||49%||34%|
|Inadequate basic infrastructure||35%||20%|
|Exchange rate volatility||38%||31%|
|Climate change and environmental damage||34%||15%|
|Future of the Eurozone||40%||16%|
The survey of more than 1,300 global leaders also revealed that the UK is rising in popularity with overseas companies. Business leaders from 16 countries see the UK as more important than last year for their short term growth prospects, including the US, China, Germany and Switzerland.
Overall, the UK is seen as the fourth most important country for growth, behind the US, China and Germany. London was highlighted in particular as one of the four most important cities for growth prospects, alongside Shanghai, New York and Beijing.
For UK CEOs, the US remains the most important export market, though Germany has overtaken China in second place.
The top three risk concerns for UK CEOs in 2017
1. Uncertain economic growth
When asked how concerned they are about various economic, policy, social and environmental threats, UK CEOs ranked uncertain economic growth top at 84%, compared to 82% among all CEOs globally.
2. Exchange rate volatility
Exchange rate volatility ranked second at 82%, significantly higher than the global 70%, due to the impact that Brexit has had on the value of the pound.
3. The future of the Eurozone
There was also a marked difference in the level of concern for the future of the Eurozone, coming third in the UK at 78% against 56% globally.
An overwhelming 91% of UK CEOs plan initiatives to drive organic growth during the coming year, compared to 79% globally, including 55% who plan new M&A activity.
UK business chiefs are also shown to be more committed to strengthening digital and technological capabilities as a way to capitalise on new growth opportunities, with 25% in the UK saying they want to do this versus 15% globally.
Kevin said: “In the tech talent race, UK organisations must be viewed as leading the way in emerging technology development. It is vital that we are able to attract businesses and people with the right tech skills, and also develop the requisite skills internally.
"With the current pace of technological change it is hard to predict what jobs will look like in the future, so as well as developing digital skills it is important that employees are adaptive and able to respond to the next skills challenge. Those that can will be in high demand.
“Emerging technology development will require diverse thinking to ensure the fourth industrial revolution is representative of the population and doesn’t leave anybody behind as we reshape our economy.”