Canadian CEOs are far less optimistic than before and are increasingly concerned by the gloomy outlook both for their companies and the global economy, according to a new survey.
As much as 29 per cent of Canadian CEOs, versus 5 per cent previously, believe global economic growth will decline, according to PricewaterhouseCooper’s annual survey. Overall, 57 per cent don’t expect the global economy to grow, compared to 43 per cent in the previous year’s poll.
“While confidence in the year ahead hasn’t shifted drastically over last year, the long-term outlook is on shakier ground: Only 40 per cent are very confident about revenue growth over the next three years, down from 58 per cent in 2018,” PWC said in a report published Wednesday.
The reasons for the pessimism range from trade conflicts to cyber security threats and lack of policy information. However, lack of available skills topped their concerns, with 88 per cent citing it as a key threat to their growth prospects.
Canadian CEOs have also soured on the promise of China. Only 12 per cent of CEOs surveyed see the Asian economic giant as a growth market, compared to 53 per cent last year. Canada and China are in the midst of a political standoff after the RCMP arrested Huawei Technologies chief financial officer Meng Wanzhou in Vancouver.
Canadian bosses also see the U.S. as slightly less lucrative, with 66 per cent identifying their southern neighbour as a growth market, compared to 88 per cent last year. Germany and the U.K. have also lost their shine for Canadian CEOs, with only Mexico seen as a growing market for the country’s business community.
The Canadian boardroom sentiment is in line with PWC’s global survey, which also suggests that international CEOs were less interested in China and the U.S. as key prospects for growth. Global interest in China has fallen from 33 per cent to 24 per cent year over year, while global interest in the U.S. has declined from 46 per cent to 27 per cent, according to the report.
“As Canadian CEOs increasingly look inward for growth opportunities against a tough global economic backdrop, the pressure to transform their businesses has never been greater,” says Nicolas Marcoux, CEO and senior partner at PwC Canada.
“The shift away from China and the U.S. creates a golden opportunity for Canadian businesses and governments to collaborate in order to enhance our country’s attractiveness for investment.”
Another issue on the top of the minds of CEOs is artificial intelligence, with 84 per cent agreeing that AI will “significantly” change their business in the next five years.
Alarmingly, only four out of 10 CEOs said AI existed in the company, and a majority of them said it had limited use in their organizations.
“But Canadian CEOs also anticipate AI will disrupt the job market along with their business,” the report noted. “In fact, the availability of important skills is the single-biggest concern in this year’s survey, and 47 per cent agree AI will displace more jobs than it creates in the long run. Closing this gap is critical to properly tackling AI.”