CEE executives are roughly in line with their global peers when it comes to expectations for their own companies’ revenue growth over the next 1-3 years, though they’re less optimistic on profitability. Just 53% expect it to increase over the next 12 months, compared with 65% globally. Proportions were higher in each of the remaining categories – decline (12% versus 9%), stay the same (28% versus 23%) and don’t know (7% to 3%).
In response to their subdued forecasts for revenues and profits at their own organisations, executives in our region seem to be taking a wait-and-see attitude rather than leaping into new initiatives. For the next 12 months, just 21% are considering new M&A to drive growth, compared with 38% globally, while 20% are looking at a new strategic alliance or JV, versus 35% globally. Nor are they planning to sell businesses (4% versus 13%). In fact, of the eight potential ways to drive growth that we asked about, the only one where a greater share of CEOs planned this type of activity was “seeking operational efficiencies” – by 78% to 77%.
CEOs in the region are a bit more sanguine than their global peers about cyber threats, with 76% saying they’re somewhat or extremely concerned (compared to 85% globally). Still, while cybersecurity used to be an IT issue, today it’s a C-suite issue, and the survey shows that this is no less true in our region. While executives’ concerns about geopolitics are certainly legitimate, they can’t be allowed to overshadow the growing threat from nefarious online actors. And while geopolitics is largely beyond the control of corporate leaders, bolstering their organisations’ defenses against cyber-attacks is something they can work on starting today.
Taxation issues remain a concern for the region’s CEOs. However, it seems that for CEE, this is more of a long-term worry than a new complaint about how their governments have ramped up spending in response to the Covid crisis. Just 52% agreed or strongly agreed that “Tax policy changes to address rising government debt levels in the country/territory in which you are based will Increase my organisation’s total tax obligation,” compared with 60% globally. But in response to a broader question, about concern over an “increasing tax obligation,” 83% versus 73% said they were somewhat or extremely concerned.
The top threats identified by CEOs in our region were in line with the global picture: pandemics were No. 1, while over-regulation ranked second in our region and third globally. The difference was in CEOs’ assessment of cyber threats, which came in second globally but only 10th in our region. Instead, our leaders said geopolitical uncertainty is their third-most-pressing concern. This reflects both recent developments and long-term trends across CEE.
Executives are also more concerned about exchange-rate volatility than their peers elsewhere, with 38% saying they’re extremely concerned, compared with 21% globally. Volatile commodity prices are another worry, with 68% extremely or somewhat concerned, versus 56% globally.
CEOs in our region are also more concerned than their global peers about the availability of key skills, at 82% versus 72%. In response, they’re adjusting their workforce strategy to improve competitiveness in ways including automation (40%) and workforce engagement and communications (39%). One lasting positive legacy of the virus may be that companies and their leaders have a deeper sense of the need to care for their employees’ well-being.
PwC surveyed 5,050 CEOs in 100 countries and territories in January and February 2021. This is up from 3,501 respondents in last year’s survey. PwC surveyed 678 CEOs in Central and Eastern Europe, with 175 being from Romania. The global and regional figures in this report are based on a sub-sample of 1,779 CEOs, proportionate to country nominal GDP to ensure that CEOs’ views are representative across all major regions. There were 163 CEOs from Central and Eastern Europe included in the sub-sample.