PwC presented the key findings of its 12th Cyprus CEO survey during a special event entitled: "Challenges of Today and Tomorrow". The 159 CEOs in Cyprus, as well as the 4,410 CEOs from 105 countries, who participated in PwC's annual Global CEO Survey, expect a decrease in global economic growth over the next 12 months. The conditions prevailing in the international scene have made CEOs become considerably more pessimistic about the course of the global economy, with a percentage of 69% supporting that it will decrease.
The bleak CEO outlook is the most pessimistic CEOs have been regarding global economic growth since PwC began asking this question 12 years ago and is a significant departure from the optimistic outlooks of 2021 and 2022. The CEOS are somewhat more optimistic regarding the course of the Cypriot economy, as the percentage of those who believe that it will shrink (56%) is smaller, in comparison to the course of the global economy.
However CEOs are more optimistic about their company’s revenue growth prospects with 48% of them stating that they are moderately confident. A similar strong trend of confidence about their own company’s revenue growth prospects is noted in the Eurozone and Globally.
Nearly 40% of CEOs believe that in a decade their organization will not be economically viable
One of the most important findings of this year's survey is the concern of CEOs about the sustainability of their businesses. When asked if their company will be economically viable in the future, if their company continues running on its current path, 40% of CEOs in Cyprus and 39% in the Eurozone and Globally answered that their company will not be economically viable within the decade.
When asked about the forces most likely to affect their industry's profitability over the next 10 years, 60% replied skills shortages, 59% technology disruptors, and 58% cited supply chain disruption. Merely 41% pointed to the transition to new energy sources and the impact those sources will bring forth.
The main concerns
Cyprus' business leaders feel that the threats to their companies growth prospects in the next 12 months are the following: inflation (47%), geopolitical risks (41%), and macroeconomic instability (26%), which also troubles the rest of society at large. The main difference compared to last year is the decline of "health risks". “Health risks” had dominated the list of threats at the 2022 survey, while now they are significantly lower-- in the fifth place, in the ranking of threats to Cyprus businesses.
Countermeasures to challenges
The way business leaders react to the multi-level challenges they face assumes particular importance. To mitigate their exposure to the effects of geopolitical conflict, nearly half (48%) plan to adjust their presence in current markets and expand into new ones, while 42% are considering diversifying their product/service offering. In their effort to mitigate against potential economic challenges and volatility CEOs have started to reduce their operating costs (47%); collaborate with other suppliers (47%); and raise the prices of their products/services (40%).
No salary or jobs reductions
As it appears, efforts to reduce the operating costs of businesses are not directed towards reducing compensation of their people. 81% of CEOs in Cyprus state that whatever happens, they will not reduce the existing salaries of their people. At the same time, a significant percentage of 65% believe that they will not reduce their workforce, and 63% that they will not delay the agreements they have concluded.
Commenting on the survey, the CEO of PwC Cyprus, Philippos Soseilos, said:
"The 159 CEOs from Cyprus who participated in the survey give us a clear picture of what gives them optimism, but even more so of what worries them during current difficult times. The multiple crises we are facing today are mainly due to the acceleration of the so-called long-term megatrends and the difficulty of getting ahead of them. Some events of recent years such as the pandemic of COVID-19 and the war in Ukraine have accelerated mega trends such as technological innovation and evolution, climate change, geopolitical shifts and social uncertainty. The bet now is to move in a timely and transformative manner across the entire spectrum of society, economy, entrepreneurship and governance.