Economic factors including trade conflicts, policy uncertainty and protectionism have emerged as the top concerns for global business leaders, according to a new survey by PwC.
These issues overtook concerns such as terrorism, climate change and increasing tax burdens, which topped the previous annual survey, as CEOs struggle to navigate recent surges in populism, PwC said.
The survey, which questioned more than 1,300 CEOs around the world, found that business leaders were generally much more pessimistic about the growth prospects of both their own companies and the global economy this year.
Nearly 30% of respondents said they expect global economic growth will decline in the next 12 months, which was approximately six times more than the 5% who gave this answer in the previous survey.
42% of CEOs still anticipate an improved economic outlook, but PwC noted this was down from 57% last year, with views this year growing more polarised but trending downwards overall.
The U.S narrowly retained its position as the top market for growth at 27% this year, down from 46% in 2018, while the second most attractive market, China, also saw its popularity fall to 24%, down from 33%.
Notably, India surpassed China as the fastest growing large economy, according to the responses from business leaders.
“CEOs’ views of the global economy mirror the major economic outlooks, which are adjusting their forecasts downward in 2019,” said Bob Moritz, Global Chairman at PwC. “With the rise of trade tension and protectionism it stands to reason that confidence is waning.”
Of the CEOs who said they were ‘extremely concerned’ about trade conflicts, 88% are specifically uneasy about the trade issues between China and the U.S, with 98% of U.S CEOs and 90% of China’s CEOs voicing concerns.
A majority of concerned leaders in China are taking a strong reactive approach to these trade issues, with 62% adjusting their supply chain and sourcing strategy, and 58% adjusting their growth strategy to different countries.
“The turn away from the US market and shift in Chinese investment to other countries are reactions to the uncertainty surrounding the ongoing trade dispute between the US and China,” Moritz continued.
Lack of comprehensive data and analytics was also a growing concern for CEOs, with 54% pointing to a lack of analytical talent, 51% citing data siloing, and 50% noting poor data reliability.
Similarly, respondents voiced concerns about the potential effects of artificial intelligence (AI) on their company’s in the near future, with 85% agreeing that it will dramatically change their business over the next five years.
Globally, 49% of CEOs said they believe AI will displace more jobs than it creates, with leaders in China particularly pessimistic at 88%.