Revenue growth

The number of CEOs who see improvement in the global economy over the coming 12 months leapt to 44%, up from only 18% last year. And just 7% predict the global economy will decline, sharply down from 28% in 2013.

For their own companies, 39% of CEOs say they are ‘very confident’ of revenue growth prospects for the next 12 months. That’s up from 36% last year. Confidence in revenue growth reached a low of 21% in 2009.

“CEOs have begun to regain confidence. They’ve successfully guided their companies through recession and now more CEOs feel positive about their ability to increase their revenues and prospects for the global economy”, says Didier Mouget, Managing Partner at PwC Luxembourg.

Yet worries continue to loom large on CEO horizons with executives sending a clear message to government with their levels of concerns about over-regulation, fiscal deficits and tax burdens at their highest levels.

“For the future, CEOs tell us that they expect three major global trends – rapid technological advances, demographic changes and shifts in economic power – will have a major impact on the future of their businesses. Finding ways of turning these global trends to their advantage will be the key to future success,” adds Didier Mouget.

CEO top concerns

As CEOs’ viewpoint on the economy slants upward, their major concerns have also changed. The level of concern about over-regulation at 72% and fiscal deficits at 71% are as high as they have ever been.  

In addition, CEOs say they are worried almost as much about a slowdown in emerging economies, 65%, as they are about sluggish growth in developed markets, 71%. Other top concerns include increasing tax burdens (70%), as well as availability of key skills (63%), exchange rate volatility (60%) and lack of stability in capital markets (59%).

Talking in more detail about regulation, nearly 80% of CEOs say it has increased costs, while 52% say that regulation makes it more difficult to attract skilled workers. And 40% say regulation has inhibited their efforts to pursue a new market opportunity or to pursue innovation.  On the positive side, over half of CEOs credit regulation for helping to improve service delivery and quality standards.

Gearing up for the future

When asked what would drive future growth, new product or service development leads the list of opportunities, cited by 35% of CEOs compared with 25% last year. 

As the global economy stabilises, CEOs have identified major trends that will transform their business over the next five years. Top among them is technological advance, followed by demographic shifts, and shifts in global economic power.

To meet these and other challenges, CEOs say they are making changes to their talent strategies, customer growth and retention strategies, technology investments, organisational structure/design, and use and management of data.

Dealing with Government

Asked to rank the top priorities for government, CEOs say they should be to ensure financial stability, improve infrastructure; and help create a more internationally competitive and efficient tax system.

“Luxembourg’s success is largely due to a succession of positive and innovative long-term government policies aiming to enhance business and diversify the country’s economy. Historically, relationships with public stakeholders have always been close, explains Didier Mouget. The latest measures have confirmed the new Government wish to retain and build on Luxembourg’s reputation for tax stability and to guarantee its competitiveness in an international context, while at the same time complying fully and positively with international initiatives towards increased transparency and the fight against tax fraud.”

The full survey report can be downloaded on PwC website.