A survey conducted for PricewaterhouseCoopers (PwC) reveals that many CEOs lack confidence in the global economy.
Published at the opening of the World Economic Forum’s annual meeting in Davos, Switzerland on Jan. 19, the poll of more than 1,400 CEOs found that most are concerned about what the future may hold; worldwide 67% believe there are more serious threats facing their businesses today than three years ago, while this number increases to 76% among Canadian CEOs.
PwC says that economic turmoil in China, falling oil prices and geopolitical uncertainties are all weakening CEO confidence. "Only 27% of CEOs (24% in Canada) believe global growth will improve over the next 12 months and just 35% (31% in Canada) say they are very confident in their own company's growth prospects," reads the report.
Asked about the top threats to Canadian companies (respondents could pick more than one), increased tax burdens topped the list and was cited by 80% of those surveyed (up from the 68% who gave this response last year). After taxes, the other most commonly named dangers were geopolitical uncertainty (cited by 71% of Canadian business leaders), currency volatility (cited by 65%), and how the government would respond to fiscal deficit and high debt burden issues (also cited by 65%). PwC notes that over-regulation is also a growing concern, named by 63% of Canadian CEOs – this is up 10% from 2015.
"Canadian leaders see similar challenges to their global counterparts. In fact, Canada feels the impact of some of these threats more acutely given the nature of our economy. A weaker Loonie has positive and negative impacts – a higher cost for many imported goods is offset by the benefits to a more competitive manufacturing sector. Volatile commodity prices are also creating a lack of confidence," comments Bill McFarland, CEO of PwC Canada. "There is no doubt overregulation is a key concern of business leaders – they lead to higher costs as well as demand a disproportionate amount of time, attention and resources," he adds.