CEOs around the world are more concerned about challenges to their businesses than was the case a year ago, a PwC survey finds.

A PricewaterhouseCoopers survey of 1,409 chief executives from 83 nations shows that two-thirds of them (66 per cent) see more threats to their firms than they did three years ago, while only 27 per cent expect stronger global growth over the next 12 months, down 10 points from a year ago.

The results come at a time when global equity indices have started the year with sharp falls, causing concerns about a global economic slowdown. The survey was issued to coincide with a gathering of global policymakers, commentators and business chiefs at the annual World Economic Forum conference in Davos, Switzerland.

While results did not distinguish between sectors – such as showing the views of banking CEOs as a discrete segment – the results may be indicative of how banking bosses think.

Regionally, 476 interviews were conducted in Asia-Pacific, 314 in Western Europe, 170 in Central and Eastern Europe, 169 in Latin America, 146 in North America, 87 in Africa and 47 in the Middle East, PwC said. 

Only slightly more than a third (35 per cent) are very confident of their own company’s growth in the coming year, down four percentage points on last year (39 per cent). 

China’s economic rebalancing, oil price falls and geopolitical security concerns are all contributing to an increase in uncertainty about the global economy’s growth prospects. Globally, just over a quarter (27 per cent) of CEOs think global growth will improve over the next 12 months, compared to 37 per cent last year, while 23 per cent think it will worsen (2015: 17 per cent). Levels of optimism among North American CEOs is half that (16 per cent) of the most optimistic regions (Western Europe, 33 per cent, and Middle East, 34 per cent). A third of China’s CEOs (33 per cent) believe global economic growth will slow down in 2016. 

Confidence in businesses’ own revenue growth for the next 12 months has also fallen (35 per cent “very confident” versus 39 per cent last year). Against this tide of pessimism, CEOs in India (64 per cent), Spain (54 per cent) and Romania (50 per cent) stand out as more optimistic. The biggest turnaround is seen in Taiwan, where only 19 per cent are very confident of short-term company growth, compared to 65 per cent last year - an astonishing slump of 46 points. However, Switzerland has the lowest level of confidence, with only 16 per cent of Swiss chief executives very confident of revenue growth compared with 24 per cent in 2015. 

Confidence in revenue growth is also down compared to last year for nearly every major economy in the world: China, 24 per cent (2015: 36 per cent); US, 33 per cent (2015: 46 per cent); UK, 33 per cent (2015: 39 per cent); and Germany, 28 per cent (2015: 35 per cent). Italy, at 20 per cent (2015: 20 per cent), and Japan, at 28 per cent (2015: 27 per cent), remained static. Only Russia bucks the trend, as confidence rose to 26 per cent from a deep low of 16 per cent last year. 

Looking at investment prospects, the US, China, Germany and the UK remain the countries CEOs view as most important for growth in the next 12 months. Mexico and the UAE have also entered the top ten in place of Indonesia and Australia. 

Red tape
As in most years the spectre of over-regulation is seen as the top threat to companies’ growth prospects, with 79 per cent of CEOs citing this – the fourth year in a row that concerns about regulation have risen. However, geopolitical uncertainty has jumped from fourth in CEO concerns last year to second this year, cited by 74 per cent of business leaders. As a result, concerns about availability of key skills have dropped from second to fourth, but remain a concern for nearly three-quarters (72 per cent) of CEOs. Worries about exchange rate volatility are in third place (73 per cent). 

Cybersecurity is also a worry for 61 per cent of CEOs, representing threats to both national and commercial interests. Concern is highest among CEOs in the US, Australia and the UK (74 per cent and more) and in the banking, technology and insurance sectors. 

Nearly half (48 per cent) of CEOs plan to increase their headcount over the next 12 months, a slight drop on last year (50 per cent). Business recruitment activity is highest in India (70 per cent), the UK (66 per cent) and China (57 per cent). 

Concern about the availability of key skills remains high (72 per cent). Several sectors have particularly high levels of concern, topped by entertainment and media, and technology, while sectors more traditionally aligned with "STEM" skills, including manufacturing, pharmaceuticals and life sciences, also feature. Geographically, concerns are highest in Asia-Pacific (81 per cent), the Middle East (83 per cent) and Africa (86 per cent), and lowest in Western Europe (59 per cent).

The top priority for government should be a clear and effective tax system, say 56 per cent of CEOs, followed by a skilled, educated and adaptable workforce (53 per cent), and infrastructure (50 per cent) – both physical and digital.