The percentage of optimistic CEOs has doubled in 2024 compared to 2023, with 38% expecting economic growth compared to 18% last year, according to the 27th edition of PwC’s 2024 Global CEO Survey, released at the Davos Economic Forum. Implicitly, the share of CEOs who expect a global economic downturn has fallen to 45% this year from a record high of 73% last year.

“As inflation moderates in all states and macroeconomic instability is no longer perceived as an immediate threat to business, business leaders have become more optimistic. We see that the main concern now is the long-term viability of the business, and many do not believe that the current model will still be relevant to the market decades from now. New technologies, climate change and other factors are forcing companies to rethink,” says Dinu Bumbetcea, managing partner of the country.

Inflation risks and macroeconomic volatility are expected to decrease by 16 percentage points (to 24%) and 7 percentage points (to 24%), respectively. However, it remains the biggest challenge facing executives around the world. Despite ongoing conflicts, the share of CEOs who believe they will influence their company fell 7 percentage points to 18%. In Romania, the situation is similar: inflation, macroeconomic instability and geopolitical conflicts remain the main concerns of general managers this year.

“In Romania, company directors’ perception of the national economy has improved compared to last year: 37% of them foresee growth compared to 26% in 2023. As a result, the share of those who assess the economic decline decreased from 62% to 47%. In addition, these forecasts are supported by the estimates of the European Commission, which show that Romania will register an economic growth of 3.1% this year, compared to 2.2% last year. Despite improved expectations regarding the macroeconomic situation, local business leaders are more pessimistic about the businesses they manage. The situation can be explained if we take into account the innovations brought by the fiscal and budgetary policy in the last quarter of last year, many of which had a negative impact on companies, as well as on inflation and the investment climate in general,” he explains. Dinu Bumbăcea.

In Romania, 30% of CEOs of Romanian companies expect a decrease in the business they manage, while 37% predict an increase compared to 52% in 2023.

Global confidence in economic growth is fragile as technology-driven megatrends such as generative artificial intelligence and climate change affect business. Almost half (45%) of CEOs say they don’t believe their current business will be viable ten years from now if it continues to grow in the current direction – up from 39% in 2023. Romania joins this trend, with the percentage of CEOs who are pessimistic about the viability of the business they run for 10 years rising to 37% this year from 27% in the 2023 edition.

More pessimistic about business development, but plans to hire

Reflecting uncertainty about how they will manage megatrends, CEOs are slightly less confident than last year about their company’s revenue growth prospects over the next 12 months, down from 42% to 37% globally. However, the research shows that CEOs are more likely to plan to increase headcount than cut it over the next 12 months, with 39% saying they expect to increase headcount by 5% or more.

Technology and climate change

CEOs expect pressure to increase over the next three years due to technology, climate change and several other megatrends. For example, they mostly see generative artificial intelligence as a catalyst for rethinking that will drive efficiency, innovation and transformative change. Almost three-quarters (70%) believe it will significantly change the way their company creates, delivers and captures value in the next three years. However, they expressed concern about increased cybersecurity risks (64%), misinformation (52%), and legal liability and reputational risks (46%). In addition, almost a third of them expect climate change to change the way they create, deliver and receive value in the next three years – compared to less than a quarter who said the same in the past 5 years.

Viability and the need for rethinking

The survey shows that smaller firms are at greater risk: 56% of CEOs of companies generating less than $100 million in annual revenue believe their businesses will only be viable for 10 years or less if they continue to operate as they are. That percentage drops to 27% for those with annual revenue of $25 billion or more.

The CEO 2024 survey examines the opinions of more than 4,700 CEOs from around the world, including Romania. The full CEO 2024 survey report for Romania will be published soon. Complete global results can be found at pwc.com/ceosurvey and interviews can be found at strategy-business.com/inside-the-mind-of-the-ceo.

Article supported by PwC Romania