7 | PwC’s 21st CEO Survey Now that President Trump can claim victory on tax reform, we expect that the US economy will continue to grow, in the short term at least. However, the next billion consumers are not going to come from North America or Western Europe, but from the rest of the world. Furthermore, the real competition for Western-based multinationals is increasingly coming from local “piranha” companies in these markets as they develop ever stronger and more sophisticated marketing and technology skills (especially in China). Sir artin Sorrell E­ €‚‚ For some, this burst of optimism is itself a little breathing space before difficult times a majority of CEOs demonstrate the highest as compared with the next highest region, reason for continued optimism and is return. For a lasting recovery, we need a possible level of confidence in their company’s Western Europe at 45%, and a global average grounded in a sound rationale. As part of this more comprehensive, broader-based, more revenue growth prospects over the next 12 of 42%. year’s survey, we asked leading economists deliberate change of context.” months. and business thought leaders to comment When we look at the geographic markets on the survey findings. Glenn Hubbard, Indeed, beyond North American shores, This divide is quite striking. While the rest CEOs are turning to for growth, again, North economist and dean of Columbia Business CEOs’ optimism is more tempered, specifically of the world is cautiously optimistic, North America, specifically the United States, tops School, observes: “We are in a cyclical regarding their own organisation’s revenue American CEOs have never been more sure of the chart; 46% of global CEOs consider it recovery that has been going on for many growth prospects beyond 2018. With their companies’ near-term prospects. Just last one of the three most important countries years since the financial crisis. People have respect to the next 12 months, CEOs remain year, only 39% reported that they were ‘very for growth, followed by China at 33% (see gotten more optimistic. I think in most parts confident; in fact, the percentage of ‘very confident’; that figure jumps to 53% this year ‘US Widens the Gap with China’). Germany of the world, CEOs believe that changes confident’ responses overall climbs. But (see Exhibit 3). The last time North American strengthens its hold on third place, with one in policy are going to continue to improve the record jump in positivity with regard to CEOs were this exuberant was in 2007, the in five CEOs considering it an important growth.” global economic growth does not translate year before the global financial crisis. growth market. With the full impact of the into an equivalent leap in confidence in their Brexit vote still an open question, the UK is Others are not so sanguine and see signs own organisation’s 12-month prospects. When asked what will drive that growth, in a holding pattern at #4. And India bumps of irrational exuberance. Noted economic Regionally, it’s a mixed bag (see Exhibit 3), virtually all North American CEOs point to Japan as the fifth most attractive market in historian Carlota Perez asks, “Is this a real with North America, Latin America, Central organic growth (94%), followed by new M&A 2018. Russia regains its place in the top 10, recovery or just a short-term blip? Historically, & Eastern Europe, and Asia-Pacific reporting (61%) and cost reduction (59%). Of note is and Canada basically switches places with when there is a real transition into prosperity, higher levels of ‘very confident’, and the rest North American CEOs’ reliance on mergers Mexico (see Exhibit 4). everybody feels it. I hope leaders don’t of the world moving in the opposite direction. and acquisitions as compared with the rest of believe this recovery is permanent. It is just Still, North America is the only region where the world – 61% cited it as a growth driver,