Investment professionals around the globe are more confident about the prospects for economic growth in 2017, according to a new study by PricewaterhouseCoopers (PwC).
The survey of 550 investment professionals and analysts and 1,300 CEOs found that 45 percent were very confident about global economic growth this up year, up from 22 percent last year.
Investment professionals cite the United States as the most important for the growth prospects of the companies they invest in over the next 12 months followed by China, with Germany and the U.K. tied for third. PwC notes that the U.K.’s exit from the European Union is not deterring investors as the U.K. moved from fourth last year into a tie for third this year.
Forty-four percent of investors also ranked New York as the most important city for growth of the companies in which they invest, followed by 33 percent ranking London and 18 percent ranking Beijing.
Investors said geopolitical uncertainty is the biggest threat to growth, followed by protectionism, the future of the Eurozone and social instability. They also caution against CEOs losing touch with their customers.
The study also found that 19 percent think technology will completely reshape competition within five years.
CEOs ranked strengthening the customer experience their fourth biggest priority, behind innovation, technology, and human resources.
“Investment professionals around the world are remarkably upbeat about global economic growth prospects, despite recognizing the shifting political landscape in which companies operate. They certainly don’t expect the globalization process to stop or be reversed. Like CEOs, investors think it is becoming harder for business leaders to balance competing in an open global marketplace with trends toward closed national policies,” Richard Sexton, PwC vice chairman, said. “Investors and analysts want companies to understand the markets they enter, act in socially responsible ways and support local economies.”
The survey also revealed that companies could improve their current communications with investment professionals, including their approaches to supporting innovation, the need for a strong corporate purpose and values, and steps being taken to prevent cyber-attacks and data breaches. Companies also need to explain more clearly their view of global economic prospects.
“There is evidence of an expectation gap, with investment professionals wanting companies to focus simply on running the business, regardless of the fact that CEOs feel pressured to follow a stakeholder-inclusive approach,” Sexton said. “The emphasis CEOs place on corporate purpose is also striking. Both point to CEOs need to explain their thinking more clearly so that investment professionals’ views become more closely aligned with theirs.”
Thirty-three percent of investment professionals do not agree that it is harder for companies to gain and keep trust in the digital age. Investors did, however, put cyber security, data privacy breaches, as well as IT outages and disruptions at the top of their list of concerns about digital issues.