Facing a cocktail of risks, from the economic slowdown in China to the rise of the Islamic State group, chief executives are more pessimistic about the global economy than at any time in three years, a development that has the potential to seriously affect their investment and growth plans, a survey of CEOs conducted by consulting and accounting firm PricewaterhouseCoopers has found.
The survey — conducted last quarter and released in time for the start of the World Economic Forum in the Swiss ski resort of Davos — found top executives from around the world fretting over a myriad of problems, including over-regulation and cybersecurity, and increasingly so as last year came to an end.
PricewaterhouseCoopers chairman Dennis Nally on Tuesday said that concerns over the global economy, which have contributed to the big volatility in financial markets over the past few weeks, have combined with geopolitical issues to dent confidence and put question marks over ambitions for this year.
“When you put it all together, the outlook for 2016 is not as encouraging as many of us would have hoped for,” Nally told reporters.
“I have to imagine that if we had done the survey in the first two weeks of January, the results would have been even more gloomy. It’s not a great picture, it’s not a great outlook,” he said.
PricewaterhouseCoopers said only 27 percent of top executives are confident that global growth will improve over the coming year. That was down 10 percentage points over the past year to its lowest level since 2013 and highlights the extent to which the global recovery appears to be running out of steam.
It also found that 66 percent of chief executives think there are more threats to their businesses than there were three years ago, up 7 percentage points.
Uncertainty has a pernicious effect on business, as it affects the way top executives plot their strategies and investments.
“It’s not good for that type of thought process,” Nally said.
In recent weeks, markets have seen big swings in stocks, oil and currencies. Much of that is due to worries over the economic slowdown in China, the world’s second-largest economy. Figures published on Tuesday showed Chinese economic growth last year slowed to a 25-year low of 6.9 percent.
Nally, who is due to step down as PricewaterhouseCoopers chairman this summer, sought to downplay concerns over China and said he hopes they would not flummox investors as much as they become “normal” for the global economy.
The survey was based on 1,409 interviews with CEOs in 83 countries and across a wide range of industries and sizes between Sept. 28 and Dec. 8.
It said 26 percent of interviews were conducted by telephone, 60 percent were online and 14 percent by post.
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