Up to 44% of local CEOs believed global economic growth would decline over the next 12 months, the Price Waterhouse Coopers (PwC) 23rd Annual Global CEO Survey has revealed. The local views matched the trend of 53% globally and for Africa, while only 17% of CEOs believed global economic growth would improve.
“CEOs expressed a record level of pessimism regarding the global economic outlook in 2020, with 53% projecting a decline in the rate of global economic growth, up sharply from 29% last year,” the survey noted.
“Since 2012, when we began asking about the prospects for growth in the coming year, the share of CEOs projecting a decline has never reached, much less surpassed, 50%. The number of CEOs who believe global economic growth will improve in 2020 dropped by a record share, from 42% to 22%. It was only two years ago 57% of CEOs believed global GDP growth would improve in the coming year,” the report stated.
“The share of CEOs very confident in their 12-month growth prospects fell to 27%, the lowest level since 2009,” the survey said while in SA, the number fell even lower to 14% for 2020 compared to 18% for 2019.
Potential threats CEOs in SA identified were uncertain economic growth (75%), with policy uncertainty and social instability both coming in at 67% as riots this week raged in Diepsloot, QwaQwa in the Free State, Boschkop and Olivenhoutbosch in Pretoria, and Groutville on the KwaZulu-Natal north coast and Newcastle on the edge.
Shirley Machaba, PwC CEO for Southern Africa, told The Citizen policy uncertainty around land reform, security of energy, national health insurance, as well as the “administrative weight” of doing business in SA were some of the bigger issues facing business. Machaba said PwC was a member of Business Leadership South Africa where PwC was proactive in collaborations with government to brainstorm “accelerators” to ignite the local economy.
“We made progress at the indaba, it wasn’t simply a talk show,” Machaba said, and added political will for implementation was required.
On 27 January, Stats SA will publish its statistics of Liquidations and insolvencies for December 2019. In November, the numbers were dire in the preliminary report with the total number of liquidations increasing by 56,4% in November 2019 compared with November 2018.
Compulsory liquidations increased by 41 cases while voluntary liquidations increased by 38 cases.
“Eight of the ten industries showed year-on-year increases with financing, insurance, real estate and business services being the major contributors (30 more liquidations), followed by unclassified (24 more liquidations) and trade, catering and accommodation (17 more liquidations),” the reported stated.
“The total number of liquidations recorded for the first eleven months of 2019 increased by 12,0% compared with the first eleven months of 2018.”
PwC surveyed 3,501 CEOs in 83 territories in September and October 2019, including 36 in South Africa. The sample of 1,581 CEOs used for the global and regional figures in this report are weighted by national GDP to ensure that CEOs’ views are fairly represented across all major regions.
Of the CEOs whose responses were used for the global and regional figures:
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