British CEO positivity falls, but 2018 outlook bright for Ireland

24 January 2018 9 min. read
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While a record-breaking share of CEOs are optimistic about the economic environment worldwide, at least in the short term, British CEOs are less positive. New research shows that nearly 60% of global business leaders now believe the world wide economy will grow over 2018, but while investment intent in the UK remains stable, only 34% of British executives feel the same. Elsewhere, the neighbouring economy of Ireland is projected to become the Eurozone’s fastest growing economy for the coming six years.

PwC’s 21st Global CEO report has been launched at the World Economic Forum Annual Meeting in Davos. One of the key findings of the survey, which took in the opinions of some 1,300 CEOs from around the world, was that positive sentiment among global executives is at its highest rate in over seven years.

Positivity in the business world saw a boost for the second year running, having languished at 27% in 2016. However, a 28% leap, the largest ever increase since PwC began asking about global growth in 2012, saw 57% of CEOs polled assert a belief that the global economy will improve in 2018. 

While those who said the economy would stay the same saw a similar change, falling to just over a third, at 36%, having sat at over half last year, those who believe there will be a decline in fortunes fell to an almost negligible quantity. Now, only 5% of CEOs anticipate a decline, down from a much more alarming high of 23% in 2016. This means negativity toward the economic outlook among CEOs sits at its lowest rate since the survey began polling for this matter, a far cry from the 48% of 2012, as the global recovery from the 2008 crisis continued to falter.A majority of CEOs believe global economic growth will ‘improve’ over the next 12 months

In the UK, with Brexit negotiations only recently reaching a significant milestone, it is worth noting that business leaders did buck this global trend, with a drop in short-term confidence regarding the economy as a whole, down to 34% from 41%. This is in line with a number of recent studies, which have found that the majority of UK businesses lack confidence in the Government’s overall Brexit strategy. 

Individual prospects

On a more individual level, many CEOs were a good deal more cautious when asked to summarise their company’s own prospects. Those who were very confident of their organisation’s future prosperity actually fell dramatically on last year’s figures. 2017 saw an equalling of the all-time high for CEO positivity regarding their group’s next 12 months, at 51%. In 2018, this figure fell to 45%, while those who were somewhat confident rose by 5% to hit 46%.

This change could reflect continued uncertainty surrounding geopolitical instability – including new import tariffs from the Trump Administration, which could potentially be up to 50% on parts manufactured overseas – or it could pertain to the rising level of competition companies on all fronts face due to technological disruption, as smaller start-ups leverage innovation to eat into the market share of established firms. 

Indeed, these fears were present in the top factors CEOs considered as threats to their organisation’s growth prospects. 38% said they were worried by the speed of technological change, while geo-political uncertainty rose to be the third most feared topic for CEOs, an increase of 9% of last year’s figures seeing the risk become a priority of 40% of those surveyed. The rate at which CEOs are so concerned with this recently saw Big Four firm EY team up with Teneo to launch a geostrategic practice for clients worried by instability. Relating to the tariffs which Donald Trump’s “America First” policies are set to impose, protectionism also saw significant growth, jumping 10 points to 29% in 2018. 

When it comes to confidence about their own three-year prospects, CEOs are more cautious

While over-regulation remained the top concern of business leaders at 42%, it was almost equalled by an unprecedented leap in businesses’ fear of terrorism. 41% of CEOs now list it as a key concern, up by 21% from last year, after a year of high profile terror attacks, including major incidents in London and Manchester. At present, the fear across the business and civilian communities alike are such that the European Commission recently hired consulting firm Infosys to head an investigation into the funding of global terror. Similarly, cyber threats saw a 16 point boost, with hacks on the NHS and Deloitte, among others, leaving 40% of business leaders concerned that they could be the next major victims. 

Global investment

In terms of investment intention, relatively little seems to have changed from last year’s survey. When asked which three countries, excluding the country in which CEOs were based, they considered the most

important for their organisation’s overall growth prospects over the coming year, the United States remained the top choice – improving 3% on last year’s results – with 46% of respondents plumping for the resurgent economic power. However, the aforementioned protectionist policies could see this intent take a knock over the next 12 months. Elsewhere, China consolidated second position, with 33% of investors remaining focused on the Asian giant.

Interestingly, two nations were replaced on the list. Indonesia and Saudi Arabia dropped from the top spots for global investment, in spite of sustained campaigns to diversify their respective economies, while South Korea and the UAE replaced them. Partially, this may come as a result of South Korea hosting the Winter Olympics, offering a major opportunity for businesses to display their wares on the world stage by investing there in the coming year. At the same time, the UAE is also working to diversify its own economy, which had been heavily dependent on oil, like Saudi Arabia. 

Terrorism and cyber threats moved up; uncertain economic growth and exchange rate volatility moved down

“Even with high levels of global growth confidence, business leaders want and need safe harbours for investment to secure short-term growth,” Bob Moritz, Global Chairman, PwC, commented, adding, “Access to consumers, skills, finance and a supportive regulatory environment are reinforcing leading markets’ positions, for business leaders to achieve their short-term growth targets.” 

Meanwhile, investment intent regarding Britain remained steadfast, at 15%. While businesses in the UK remain braced for a worst-case-scenario Brexit, with some 75,000 financial jobs alone forecast to leave London after 2019, many investors seem happy to wait and see how negotiations with Brussels play out. Talks between the UK Government and the EU will finally enter their second phase this year, after stumbling points including citizens’ rights and the Irish border were finally navigated late in 2017. 


Amid the findings PwC released at the famous Davos economic summit, the firm also built on the CEO study to provide its latest Global Economic Outlook. The Outlook projects that Ireland is set to become the fastest growing Eurozone economy for 2018 through to 2024. The Irish economy is projected to show GDP growth of 3.5% in 2018 and average growth of 2.8% for the period 2020 to 2024. This compares to Eurozone average growth of 2.2% and 1.6% respectively for these periods.

The prediction counters the anticipation by some for frigid economic prospects for the Republic, based on the slowing growth of its consulting industry. Investment in management consulting is often seen as a key indicator of the health of a nation’s economy – and a slowing of uptake in the sector can often indicate the tightening of belts across an economy bracing for a crisis. The Irish consulting industry had experienced an explosive bout of growth at 11% leading to 2015, but this tapered off to 5% by 2016. The IMCA projected a further-slowing of a 4.2% GDP increase in 2017. Now, however, PwC believes that the Irish economy could be returning to a period of prosperity not seen since the end of the Celtic Tiger era, between the mid-90s and the late 2000s. 

The US remains the top spot for global investment, while India moves into the top 5

According to Feargal O'Rourke, PwC Ireland’s Managing Partner, the positivity in the Global CEO report can only be good news for Ireland, as a strong global economy will likely underpin the progress the nation has seen in recent years.

Rourke said, "Ireland's strong economic growth stems from continued investment and household consumption growth, as well as continuing FDI flows. This is boosted by a favourable business environment, decreasing unemployment as well as positive economic news in the Eurozone, which is expected to boost Irish exports.”

However, the tax services expert was also keen for Irish companies not to count their chickens before they have hatched. O’Rourke concluded by warning that in an unprecedented era of change, uncertainties do exist, thanks to continued instability surrounding Brexit, continued change in the US economy, and the looming spectre of technological disruption. 

“Global tax reform together with the impact of the US tax overhaul is a priority on many Irish boardroom agendas… and technological disruption will redefine how we work and live. We see companies tackling these challenges head-on as they continue to invest in their businesses and their people, building markets and using technology to innovate how they operate," he said.