CEOs may be in less spirits than usual as they sip sharp Davos spring water and eat expensive, sustainably farmed fish at this year’s World Economic Forum (WEF).
The PvC Global CEO Survey, which polled 4,410 CEOs in 105 countries and territories in October and November 2022, found that 73% of CEOs believe global economic growth will decline over the next twelve months. The research was published at the beginning of the VEF.
“The CEO’s tumor outlook is the most pessimistic CEOs have been on global economic growth since we started asking this question 12 years ago and represents a significant departure from the optimistic outlook in 2021 and 2022, when more than two-thirds (76% and 77 ) %, i.e.) thought that economic growth would improve,” PvC said in a press release.
Inflation, macroeconomic instability and geopolitical conflict are ranked as the biggest threats to businesses. Almost 40% of CEOs surveyed do not believe their organizations will be economically viable in 10 years if they do not transform.
“The world continues to change at a relentless pace, and the risks facing organizations, people – and the planet – will only continue to grow,” said PvC Global President Bob Moritz. “If organizations are to not only thrive – but survive the next few years – they must carefully balance the dual imperative of mitigating short-term risks and operational requirements with long-term outcomes – because businesses that do not transform will not be sustainable.” “
The only bright spot in the survey was that CEOs say they don’t plan to cut deeply from a layoff perspective: About 60% of respondents have no plans to reduce headcount, while 80% have no plans to cut compensation amid the ongoing battle to retain talent.
The less upbeat mood among CEOs at VEF comes as investors continue to feel the sting of a 2022 bear market and recession fears swirling from rising interest rates. Slow economic growth and an uncertain demand outlook have prompted mass layoffs recently at big tech names like Salesforce, Amazon, Meta and others.
Either way, S&P chief U.S. economist Beth Ann Bovino thinks investors and corporate leaders should remain cautious about the recession.
“I see some of the pain that households are feeling … in terms of inflation in their pocketbook means they’re starting to pull back on spending,” Bovino said on Yahoo Finance Live.
Bovino said she still expects a “shallow” recession later this year.
“We expect the unemployment rate to rise,” she added. “Not at the same level as the pandemic, but closer to 5.6% by the end of the year or early next year.”
Brian Sozzi is the editor-in-chief and presenter at Yahoo Finance. Follow Sozi on Twitter @BrianSozzi and on LinkedIn.
Click here for the latest trending stocks on the Yahoo Finance platform
Click here for the latest stock market news and in-depth analysis, including the events that drive stocks
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance at Twitter, Facebook, instagram, Flipboard, LinkedInand YouTube