Global CEO sentiment improves but geo-political instability could scupper progress

15 January 2018

CEOs are more upbeat than about their growth prospects, particularly in Europe. However, political strains such as Brexit and the incumbent Whitehouse administration remain key risks to growth. According to a new report, instability arising from unpredictable events including Brexit continue to cause uncertainty.

In a new report into the sentiment of CEOs, McKinsey & Company surveyed 1,407 executives across all global regions. The paper, titled ‘Economic Conditions Snapshot’, forecasts that in most regions, economic conditions are expected to improve in the coming six months. Outlooks from respondents in Europe expected conditions to be the same, at 44%, while 38% are expecting conditions to improve. In the Asia-Pacific region, mixed results saw 32% expecting conditions to get better, 28% worse and 40% to remain the same. In India, almost three quarters, or 73%, of respondents expect improvement, while almost half (48%) expect conditions to improve in North America.

In terms of current conditions compared to six months ago, the research noted considerable reflection towards improved conditions, particularly among European respondents. Sentiment among the continent’s CEOs rebounded with 61% suggesting that the economy was improving, followed by Latin America (58%) and India (57%). 27% of those in developing markets, however, were concerned that conditions had deteriorated.

Economic sentiment.

In terms of the top-three risks to growth, domestic political conflicts was the most often cited, at 36% of respondents, followed by geopolitical instability, at 32%. The popping of an asset bubble increased slightly, to 22%, while changes in trade policy was noted as a concern by 21% of respondents.

Different regions have varied results in terms of impact from high-ranked risks. In North America, domestic political conflicts were noted by 52% of regional respondents as a risk in the top-three, followed by change in trade policy and geopolitical instability. In Europe, the top concern was geopolitical instability, followed by domestic political conflicts. In the Asia-Pacific region, geopolitical instability was by far the most concerning, at 54% of respondents, followed by an asset bubble at 25% of respondents. Risk to global grow

In terms of key risks to global growth over the next 12 months, global instability has climbed steadily, with the risk increasing from 50% to 72% over the final two quarters of 2017. This was partly thanks to key uncertainties, such as North Korea and Iran, ramping up toward the year’s end. Changes in trade policy, particularly regarding Brexit and the Presidency of Donald Trump, are seen as increasingly unlikely in the next 12 months, from 42% citing it as a potential risk in March to 27% in the latest survey. Concern around an asset bubble has increased from 14% to 27%, while concerns around the slowdown of the world’s second largest economy has decreased by 3 percentage points to 21% of respondents.

In the long-term, geopolitical concerns centred on the Middle East and North Africa have decreased from 35% to 32%, while rising income inequality is seen as a growing problem, up from 29% in June to 32% in the latest survey. Geopolitical instability in Asia has rocketed up the scale of concern, from 16% in June to 31% of respondents in the latest report. Volatility across global financial markets has remained relatively stable in terms of concern, at 26%, relative to 25% in the previous survey.Long-terms trendsIn terms of the emerging trends that have the biggest potential effect on companies’ business in the coming decade, a divergence between advanced and emerging economies is noted. Developed economies are particularly aware of the effects of technology, with 62% citing the ‘cumulative effect of technological innovation’, compared to 43% of all respondents. Threats from technology related threats, such as cybercrime, as well as terrorism, are also noted as the biggest concerns in developed economies (30%) compared to emerging ones (18%).

Emerging economies, meanwhile, cited development in energy and resource management as a key trend (27%) compared to 15% of developed economy respondents. In addition, new economic, social and regulator policies were cited by 42% of emerging economy respondents and by 33% of developed market economies.

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Project management industry adds £156 billion of value to UK economy

15 April 2019

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.


Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”