A new survey is showing CEOs and investors have widely differing views on the future of the global economy,
While 73% of prominent CEOs are expecting a worsening of macroeconomic conditions for the first half of 2023, 76% of investors expect those conditions to improve.
The numbers come from a survey conducted by tainoA CEO advisory firm that interviewed over 300 global CEOs and institutional investors representing approximately $3 trillion in company and portfolio value.
The CEOs surveyed were heads of companies with annual revenues of $1 billion or more. Meanwhile, the investors selected for the survey were “a global sample of professional investors in investment banking, institutional investing, venture investing, asset management, private equity and hedge funds.”
Globalization, a term used to describe the process of decreasing integration and cooperation among economies around the world, is central to understanding the report’s discrepancies. The survey found that 86% of CEOs and 94% of investors agree that globalization is a reality for the global economy, and nearly half believe the process is already underway and will be significant.
Periods of globalization are marked by a general move toward a less connected world with regionalization or nationalization of global supply chains, increasing measures of protectionism within countries, a reduction in global trade, and more local solutions to economic problems.
Recent global events such as the COVID-19 pandemic and Russian war in Ukraine has shown just how fragile global supply chains can be. These major global events sound the alarm for companies that depend on the free flow of goods and services across continents for their operational success.
CEOs of mid-sized companies aligned with investors in thinking that the macroeconomic outlook is more positive than negative.
The survey asked whether the global economy, access to capital, industry conditions and customer demand are likely to improve or worsen in the first half of 2023. Had the opposite view.
Globalization could be the key behind this divide. While mid-sized companies and investors are more regionally focused, larger companies with global operations have experienced their biggest disruptions since 2020. Large companies are facing the disruptive effects of globalization on a daily basis, and this can affect their outlook. ,
Most investors said that adjusting supply chains and finding new sources of funding are key elements to adapting to a new deglobalized status quo.
The survey also found that 26% of CEOs said downsizing is a viable possibility and 32% are considering onshoring part of their workforce.
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