Some of the world’s top executives are shrugging off concerns about the global economy as new research shows that business confidence is up this year despite the threat of political instability across the world.
A survey by PricewaterhouseCoopers (PwC) of more than 1,300 chief executives, commissioned to coincide with the 47th World Economic Forum in Davos, Switzerland, has found that business confidence among senior executives has increased since last year.
Some 38 per cent of those surveyed were confident about their company’s growth prospects compared with 35 per cent last year. Similarly, 29 per cent believe global economic growth will pick up in 2017, compared with 27 per cent in 2016.
In Ireland, however, the picture is less positive, with Irish businesses more cautious than a year ago, primarily as a result of Brexit. Three-quarters of businesses in Ireland expect revenue growth this year, compared with 88 per cent last year.
Ciarán Kelly, of PwC Ireland, said Ireland was more exposed than most countries to the challenges of Brexit and possible changes in US tax policy under the Trump administration.
“With both events, there is going to be a significant period of uncertainty which is weighing on business confidence. In particular, it remains to be seen exactly how the US tax policy will play out,” he said.
Nonetheless, Mr Kelly said the study reflected a certain improvement in investor sentiment in Ireland and across the world. “We are seeing more of a willingness to invest than we have seen in the last 10 years. The prospect of a new focus on spending and investment under the incoming US regime is reflecting a political willingness to move away from austerity.”
Optimism
Launching the 20th annual Global CEO survey in Davos, PwC global chairman
Bob Moritz
welcomed the findings. “Despite a tumultuous 2016, CEO confidence is moving back up – albeit slowly and still a long way from the levels we saw back in 2007,” he said.
“But there are signs of optimism right across the globe, including in the UK and US where, despite predictions of a Trump slump and a Brexit exit, CEOs’ confidence in their companies’ growth are up from 2016.”
The relatively upbeat picture will be welcomed by the global business community who are meeting in Davos against a background of growing political uncertainty following the electoral success of Donald Trump and the decision by Britain to leave the EU.
Both events are likely to loom large over the five-day event which opened last night, with a number of sessions dedicated to the theme of globalisation and the problem of growing inequality. A study by the World Economic Forum released yesterday shows that median incomes declined by 2.4 per cent between 2008 and 2013 across 26 advanced economies. The report called for a change in policy priorities to respond to the “insecurity and inequality” accompanying technological change and globalisation.
World’s poorest
It follows a report from Oxfam released on the eve of the summit which found that eight individuals own the same wealth as 3.6 billion of the world’s poorest people.
Among the key global figures attending the forum is Chinese premier Xi Jinping who will address it today. It is the first time a Chinese leader has attended the event.
Davos will also see the usual smattering of celebrities flying in for the occasion. Pop star and Unicef ambassador Shakira made her first appearance last night, while regulars will.i.am and Matt Damon will also attend.
