As the New Year begins, will executives around the world be kept awake at night? A new survey says CEOs in the United States and globally are bracing for a recession and increased inflation.
Despite these issues being at the top of their concern list, only 37% of American CEOs say they are prepared for a recession, and 34% for higher inflation, according to a survey by The Conference Board.
Amid increased inflation and a potential recession, CEOs’ plans to increase profits in 2024 include introducing new products/services, investing in technology, increasing sales through marketing, and entering new markets.
C-Suite Outlook 2024 also suggests that CEOs have thrown up their hands when it comes to bringing employees back to the office full-time. Only 4% of US CEOs say they would prefer a full-time return to the office. Consistent with previous surveys, attracting and retaining talent remains the number one internal focus for CEOs globally.
While the survey shows that CEOs and boards are fairly well aligned on ESG priorities, with education and economic opportunity topping the list, boards are less confident than executives that their companies are effectively addressing ESG issues. including ESG response.
Additionally, wars in the Middle East and Ukraine are top of mind, but for US CEOs, the biggest geopolitical threat is at home: rising national debt, which they ranked as their top geopolitical risk in 2024. Is.
The survey reflects the views of more than 1,200 executives, including 630 CEOs. Participants consider the top business threats and opportunities in 2024. The respondents were primarily from four regions: the United States, Latin America, Japan, and Europe.
Key features of C-Suite Outlook 2024 include:
recession and inflation
Biggest fear for 2024: CEO fears recession
US CEOs: They rank recession as the #1 external concern for 2024.
Global CEOs: The recession is also the #1 external concern among executives globally.
Despite a cooldown in 2023, inflation remains high on the worry list.
US CEOs: They rank inflation as the #2 external concern for 2024.
Global CEO: Inflation is also another external concern among executives globally.
Most CEOs say their companies are not prepared to deal with a recession or inflation crisis.
US CEOs: Only 37% say they are prepared to deal with a recession; 34% are prepared for higher inflation.
Global CEOs: Worldwide, only 27% say they are prepared for a recession; Same goes for 27% inflation.
borrowing costs
High borrowing costs have increased CEO concerns.
Global CEO:
Worldwide concern in 2024: CEOs globally rank high borrowing costs as the #4 external concern for 2024.
On their radar in 2023: They ranked it #10 on their annual list of concerns.
A little concern in 2022: They ranked it pretty low, at #22.
US CEOs: They rank it as the #6 external concern. It was also on top in 2023 (ranked as #4 concern).
development plans
For short-term profit growth, CEOs are prioritizing new products, new markets, technology investments and marketing.
Global CEO: Top strategies are 1) Introducing new products/services; 2) Increase sales through marketing; 3) Enter new markets; and 4) invest in technology.
US CEO: US CEOs have similar priorities, for example 1) introducing new products/services; 2) Invest in technology; 3) Increase sales through marketing; and 4) entering new markets.
For long-term revenue growth, they will invest in innovation, digital transformation, new business, marketing and talent.
Global CEO:
Top growth strategies over the next 3-5 years: 1) Invest in innovation; 2) New directions of business; 3) Digital transformation (including AI); 4) Marketing and promotion; and 5) developing and retaining existing talent.
American CEOs: American CEOs cite the same top-five priorities—and in that order.
geopolitics
For US CEOs, the biggest geopolitical risk lies at home: the national debt.
US CEOs: They rank national debt and deficit as the #1 geopolitical threat to their operations in 2024.
Global CEO: Around the world, debt is less of a concern. At #6 on the list of geopolitical threats is the national debt of the United States, and the impact of national debt and deficits in the countries in which they operate.
CEOs around the world are concerned about wars and rising global tensions.
Global CEOs: High energy prices top their list of geopolitical threats to 2024. Other high-priority risks include the possibility of an increase in cyberattacks (#2), war in the Middle East (#3), and war in Ukraine (#4).
US CEOs: In addition to the national debt and deficit (#1), the top geopolitical concerns of US CEOs are cyberattacks (#2), war in the Middle East (#3), high energy prices (#4), and the war in Ukraine. #5).
Return to office and human capital
RIP: The fight upon returning to the office.
US CEOs: Only 4% of US CEOs say they would prioritize bringing employees back into the office full time.
Global CEOs: Similarly, 4% of CEOs worldwide would prefer a full-time return to the office.
Labor shortage and talent issues are factors in the decision to end the fight back in office.
US CEO: Attracting and retaining talent is the #1 internal priority. Labor shortage is the #7 external priority.
Global CEOs: Attracting and retaining talent is the #1 internal priority. Labor Shortage #5 Are external priorities.
artificial intelligence
CEOs strongly embrace AI – and fear being left behind more than the dangers of the technology.
CEOs see big ROI in AI:
US CEOs: 92% believe AI will increase productivity; 86% expect it will improve marketing capabilities; 63% expect sales, revenues and profits to increase.
Global CEOs: 91% worldwide believe AI will increase productivity; 79% expect it will improve marketing capabilities; 68% expect sales, revenues and profits to increase.
Are CEOs underestimating the risks of AI?
Less concern about regulatory burden:
US CEOs: Only 45% think AI will increase their regulatory burden, while the US, EU and others target AI risks.
Global CEOs: Only 37% of CEOs worldwide agree.
ESG
CEOs see the benefits of clean energy but are not prioritizing renewable energy investments.
US CEOs least enthusiastic:
US CEOs: 32% say the transition to renewable energy would be very positive for their organizations.
Global CEOs: The share among CEOs globally is 51%.
The transition to renewable energy is not a high priority for growth: When asked to rank their upcoming growth plans, CEOs in the US and globally ranked renewable energy only 20th out of 23 options.
Boards and CEOs are aligned on ESG priorities, but boards are less confident about how the company is performing.
Priorities: Education, economic opportunity and GHG emissions are the top three ESG issues for boards and CEOs.
Business integration: 64% of directors say ESG is being effectively integrated into the business, compared to 76% of CEOs.
Response: 56% of board members say their companies are handling ESG feedback well, while 70% of CEOs say the same.
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