CEOs wary about year ahead
NEARLY two-thirds of CEOs in the Caribbean say they believe regional economies will slump this year, and just about a third say they don’t believe the organisations which they lead will be viable in the next 10 years if they continue on their current path.
The bleak CEO outlook, contained in PricewaterhouseCoopers (PwC) 26th Annual Global CEO Survey released over the weekend, represent a stark reversal from 2020 when 69 per cent of Caribbean CEOs thought economic growth would improve.
It is, however, lower than the 73 per cent of CEOs around the world who believe economic growth will decline over the next 12 months.
In addition to a challenging environment Caribbean CEOs’ confidence in their own company’s growth prospects also declined by a dramatic 40 per cent, with less than half being very or extremely confident compared to the survey conducted in 2020 when almost 80 per cent were either somewhat confident or very confident about their organisation’s prospects for revenue growth over the next year.
The survey also found CEOs are also seeing multiple direct challenges to profitability within their own industries over the next 10 years.
In response to the current economic climate, Caribbean CEOs are looking to cut costs and spur revenue growth, though 66 per cent say they do not plan to reduce the size of their workforce in the next 12 months. A vast majority — 84 per cent — indicate they do not plan to reduce staff remuneration in order to retain talent and mitigate workforce attrition rates. The CEOs’ outlook aside, the top concerns expressed were about inflation, macroeconomic volatility, and climate change.
“Decades-high inflation, volatile economies, and the impact of climate change have contributed to a significant rise in Caribbean CEOs’ pessimism,” Bruce Scott, territory leader, PwC Jamaica said.
“Both locally across the Caribbean and globally, CEOs are re-evaluating their operating models and cutting costs yet, despite these pressures they are continuing to put their people front and centre as they look to retain talent in the wake of the ‘Great Resignation’. The world continues to change at a relentless pace, and the risks facing organisations, people and the planet will only continue to rise,” Scott added.
He pointed out that despite this rising pessimism and its potential impact on international trade and expansion into new markets, Jamaica’s macroeconomic indicators are still trending in the right direction and a number of sectors are still seeing moderate growth, so it’s not all doom and gloom.
He warned though that if organisations are to not only thrive but also survive the next few years they must carefully balance the dual imperative of mitigating short-term risks and operational demands with long-term outcomes — as businesses that don’t transform won’t be viable.
That warning comes as the survey showed 58 per cent of CEOs plan to diversify the product and service offerings from their companies, while 44 per cent said they will be looking to raise prices.
“The risks facing organisations and society today cannot be addressed alone and in isolation. CEOs must therefore continue to collaborate with a wide range of public and private sector stakeholders to effectively mitigate those risks, build trust, and generate long-term value for their businesses, society and the planet,” he stated.