The most recent PWC Global CEO survey asked over 1,300 global leaders about their prospects for 2015. Given the currently intensified geopolitical uncertainty, CEOs are generally less confident in global economic growth this year compared to last year. Yet, the PWC survey results indicate that they remain confident of their own business prospects, as today global leaders see both more risks and more opportunities for their companies.
Speaking of the markets with the best opportunities, previous years focused heavily on emerging markets, viewing them as pools of uncontested market space, investment potential and rapid economic growth. For example, as one of my older posts highlights, apart from the often mentioned BRIC economies, global leaders have been looking into even more surprising new destinations for expanding their businesses. The prospects for 2015 look slightly different though. Specifically, PWC concludes that CEOs are more optimistic about mature than emerging markets this year. Notably, the US market has overtaken China as the most important overseas growth market for the first time in the last five years, the UK is ranked higher than Brazil, Germany retains its strong positions, and the Eurozone seems to also have improved and provides more opportunities in the eyes of CEOs. Although many emerging economies – notably Indonesia, Colombia, Korea, and Vietnam – still evoke the interest from global businesses, there seems to be more caution today, especially towards some of the BRICS. As noted by the PWC professionals, global CEOs will definitely continue having BRICS on the radar, although they are well aware of both structural and political challenges. For example, Russia’s economy is struggling today due to sanctions related to the Ukraine conflict, while Brazil is seen as underperforming as a result of inefficient government policies.
Similarly, China has lost 4% of the optimism compared to 2014. A recent Economist article suggests that ‘the bosses of foreign firms with operations in China grumble that their lives have got harder of late’. The difficulties seem to stem from the slowdown in growth, with related protectionism of the local market from foreign investments in some specific areas, such as the automotive industry or the internet. Yet, as the PWC data suggest, China’s GDP growth is still perceived higher than in most other economies, which keeps it among the top prospect markets. This attitude seems reasonable especially, as The Economist reports, China’s primer minister, Li Keqiang, has promised global business leaders that they are still welcome in China, and that foreign companies will be treated equally to domestic ones.
All in all, in line with Winston Churchill’s quote that ‘an optimist sees the opportunity in every difficulty’, global CEOs seem to be optimistic about responding to disruption with even higher dynamism in their prospects towards global markets.