In keeping with this, for the last few years, globally, CEOs have been optimistic, and this optimism is set to continue over the next 12 months, with more than half (57%) believing the global economy will improve in the next year. This is up from 29% in 2016. It is also the largest ever increase since PwC began asking about global growth in 2012.
CEOs believe that changes in policy since 2008 will improve growth for the global economy. “In South Africa, this is not the case; borne out by the declining levels of confidence. As an emerging economy, the country missed a fantastic opportunity as all other emerging economies grew well during this period. We need to change this by stimulating growth to tackle the challenges of unemployment and poverty in our country,” says Shango.
PwC’s 21st Annual Global CEO Survey was recently released locally, following its global release in Davos at the World Economic Forum (WEF) by the PwC global chairperson, Bob Moritz. Locally Dion Shango, CEO of PwC Southern Africa presented the Survey, with an emphasis on South Africa at the African Pride Hotel in Melrose Arch, Johannesburg.
The Survey needs to be viewed in the context of an improving growth outlook globally. The World Bank points to a broad-based upturn in all major regions of the world. China has returned to good growth, and the recovery in commodity prices and in oil have all had a positive impact on sentiment overall. In particular, the United States (US) and Europe are seeing an investment recovery. All in all, regions are showing good momentum of growth in recent years, despite this being lower than previously.
In terms of South Africa, it must be kept in mind that the Survey interviews were carried out before the ANC Elective Conference in December, which had a positive impact on the county. This can be seen in the US Dollar price that has improved by 16%* in our exchange rate to under R12.00 a dollar,” says Shango.
Short-term growth prospects for local CEOs have halved since 2013, from 46% to 22%. This is concerning. In contrast, 42% of global CEOs are confident about short-term growth. This underscores that what we are doing locally is not the same as our global counterparts.
While 88% of SA CEOs are more confident about the medium term, they are still not as positive as a year ago (2016: 91%). Their global counterparts follow the same pattern with 91% optimistic versus 97% in 2016.
Activities to drive growth and profitability includes organic growth (80%), cost reduction (59%) and new strategic alliances (56%). The same are the top three globally, but with 79%, 62% and 49% percent respectively.
SA CEOs see growth coming from US (32%) the UK (27%) and China (24%). China has moved off the top spot for the country. India and Germany (17% and 12% respectively) remain in the next spots. Mozambique with 12% has replaced Nigeria. Kenya, Nigeria, Botswana and Namibia are in the rankings with over five percent, but it is sad to see that the continent is not more prominent in this ranking.
The Survey entailed interviews with 1,293 global companies in 85 countries in the fourth quarter of 2017. In South Africa 41 interviews were carried out with local CEOs; all of which were included in the global survey. The Survey comprises core questions that are asked every year, supplemented by questions that explore a theme or focus on an issue questions from time to time.
In South Africa, 54% of the CEOs lead companies to the value of $100m and $10bn and 44% employ more than 1,000 people locally. Over half of the CEOs interviewed have been at the head of an organisation for more than five years. Of the CEOs, 68 are over the age of 50.
