Business confidence among industrial manufacturing CEOs has fallen to the lowest levels since 2013 according to PwC’s 19th Annual Global CEO Survey. In the report, CEOs rated geopolitical uncertainty (82%), exchange rate volatility (77%), the availability of key skills (76%), and fluctuating commodity prices (64%) among their top business risks over the next 12 months. However, when asked to consider the potential for economic and revenue growth over a three year period, the picture is brighter with half of the CEOs confident of growth – the highest level since 2010
According to Cara Haffey, PwC’s UK industrial manufacturing leader, this is a result of the industry’s ability to adapt and reinvent itself when facing uncertain or challenging times. “It’s no surprise that ongoing developments – from slowing growth in China to the threat of escalating conflict in the Middle East – are taking their toll on confidence levels. But we believe there’s a more fundamental shift going on: from a globalised world to a more divergent and multi-polar one where technology is transforming the expectations of manufacturing customers and stakeholders. As we’ve seen in the past, the industry has the ability to successfully respond to significant market challenges by taking a longer-term view, embracing new ways of working as well as novel ways of interacting with customers. It’s done so before and can do so again. Here in the UK, we’re seeing much greater awareness of the need for digital and technology innovation as firms respond to these disruptive forces. As well as helping companies meet evolving stakeholder expectations, this can also lead to improved communication across the supply chain, better understanding of customer demands and transformation of how core risks are defined and managed.”
The report suggests that two-thirds of CEOs (65%) believe supply chain partners have a high or very high impact on their organisation’s strategy, compared to just 48% of CEOs overall.
As well, 89% of industrial manufacturers say customers and clients have an impact on their organisational strategy, making them the industry’s most influential stakeholder group. Meanwhile 73% plan to make changes to their company’s values, ethics and code of conduct.
Haffey states, “As firms face up to the challenges ahead, we’re seeing many of them taking the pulse of competitors – much more so than in other sectors. Attracting – and retaining – talented employees is also a key focus for three in five CEOs. However, while many are already adopting new talent retention strategies, the focus is commonly on the leadership pipeline rather than other parts of the organisation. Much more action is needed on training and mobility to further close the skills gap.”