Worsening global economic conditions are worrying CEOs everywhere. High inflation, rising interest rates, supply chain restructuring, geopolitical tensions and the polarization of economic influence are all undermining the morale of company CEOs who expect 73% a global economic slowdown in the coming months.
Every year for 26 years, the consulting firm PwC has conducted an annual global survey of CEOs to gauge their mood on various current issues and, since 2012, to measure their level of confidence in the face of the economy’s potential for the coming year.
The overall results of this annual survey, carried out among 4,410 CEOs of companies in 105 countries, were revealed at the last World Economic Forum in Davos, but the CEO of PwC Canada, Nicolas Marcoux, was kind enough to break down the figures to compare the mood of Canadian CEOs to those of the rest of the world.
Overall, the 192 Canadian business leaders who took part in the global survey share the pessimism of the CEOs surveyed regarding the expected slowdown in economic activity over the next year, while 76% of them anticipate once morest 73% of their counterparts in other countries.
This pessimism contrasts sharply with last year’s results when 77% of global CEOs anticipated a year of positive growth, the highest percentage on record since 2012. This year’s score of 73% is also the worst on record in ten years.
Despite the apprehended economic contraction, very few CEOs plan to make layoffs in the next year. Globally, 24% of business leaders anticipate a hiring freeze instead, compared to only 18% in Canada.
In a context of widespread labor shortages, 36% of CEOs expect resignations or retirements compared to 41% of Canadian CEOs who fear such an eventuality.
What distinguishes our CEOs from those of the rest of the world, however, is their relative confidence in their company over a ten-year horizon.
Companies must continually reinvent themselves, and the pressure is very strong to integrate the changes brought regarding by new technologies.
So much so that 39% of CEOs worldwide say their company won’t be viable in ten years or less, if it continues to operate as it does now. In Canada, this percentage drops to 25%. Our CEOs have greater confidence in the sustainability of their operations over the long term.
Adapt in a changing world
This high vulnerability of CEOs with regard to the viability of their business model over a ten-year horizon strikes me as worrying to say the least, but it does not surprise Nicolas Marcoux, CEO of PwC Canada.
PHOTO ANDRÉ PICHETTE, LA PRESSE ARCHIVES
Nicolas Marcoux, CEO of PwC Canada
“In a world that is constantly changing, you can’t think only in the short term, he believes, but many CEOs have no choice but to manage in the immediate future, especially in the context of perpetual whirlwind generated by the COVID-19 pandemic over the past three years.
“There’s digital transformation to be achieved, process automation, bringing together the supply chain, migration to cloud computing and artificial intelligence, all of which are challenges that business leaders must tackle at the same time. time. »
Companies need to take advantage of the slowdown to get up to speed. You can’t be two years behind in 2023, everything is changing too fast.
Nicolas Marcoux, CEO of PwC Canada
“The key for companies lies in the allocation of capital, how they will invest to strengthen their business model”, says Nicolas Marcoux.
How does he explain that Canadian business leaders are less pessimistic regarding the sustainability of their business model?
“We have more entrepreneurial CEOs in Canada than in the rest of the world, they are more positive and more determined, they are more represented in the survey than in other countries”, assesses Nicolas Marcoux.
At a time of the climate crisis and the actions to be taken to decarbonize the economic activity of companies, the results of PwC’s annual survey are also disconcerting.
Globally, 33% of CEOs are not looking to reduce their carbon emissions or have not yet implemented their reduction plan. In Canada, 49% of CEOs do not plan to do so or have not done anything yet.
Which is quite incredible when you know how much the new ESG management criteria are now at the heart of the investment strategy of lending institutions that participate in the financing of business development.
Many business leaders in Canada and elsewhere in the world will have to quickly mend their ways because they will have to be accountable to their customers, their suppliers, their partners and even their employees. If they wish to sustain their activities beyond the ten-year horizon, they will have no other choice. Otherwise, it will be too bad for them.
