Domestic or international, top-level executives continue to see the risk of a recession as the biggest threat to their companies and livelihoods.
In a survey conducted by The Conference Board, the thinktank behind the Consumer Confidence survey, CEOs and other C-suite executives from Asia, Europe, Latin America and the United States dished about their most pressing internal and external concerns headed into the new year. Nearly 750 CEOs and 800 C-Suite executives participated in the annual survey of business leaders, noting recession fears, political instability and trade uncertainty as their primary concerns.
However, The Conference Board suggested these fears need not become reality.
“The ongoing concerns about recession risk among business leaders reflect the slowing economy of the past year and the uncertainties about the outcome of the trade disputes and other policy concerns,” Bart van Ark, chief economist at The Conference Board, said in a statement. “However, given a slightly better outlook for the global economy and an easing of trade tensions, we anticipate that a drumbeat of negative sentiment—which can become a self-fulling prophecy—can be avoided, and that we will see more confidence about business prospects in 2020.”
This is the second straight year global executives have ranked a recession as their main concern. In the U.S., recession fears moved up three spots to No. 1 after being ranked third in the previous year, unseating cybersecurity issues. Chinese and European CEOs concurred, and Latin American and Japanese CEOs both ranked it second in terms of priority.
The runner-up concern is trade uncertainty, which Chinese executives caught in the fray of the U.S.-China trade war listed as their top concern. In China, CEOs are more concerned with economic sanctions than in any other region “by a large margin,” according to The Conference Board. The thinktank said this may have more to do with ongoing conflicts regarding technology and economic retaliation rather than the temporary effect a trade war might have.
“The role technology plays in this conflict is deep and enduring,” the firm said. “Tariffs are likely to be temporary and easily subject to negotiation, but technology blockades, via economic sanctions, are not.”
Other rising concerns centered around the growing threat of competition in a saturated global market. Competition was the second-highest ranked concern for U.S. executives, the same spot it held last year. CEOs in China agree, with fears of competition moving from seventh on the list of concerns, to third over the course of 2019.
Similarly, cybersecurity loomed large in the minds of the world’s business leaders last year. More than 70 percent of survey respondents said they plan to increase cybersecurity budgets over the next year, although nearly 40 percent admitted their organizations have no clear strategy in the event of a cyber attack.
Climate change fears are still somewhat lower among international business leaders, though they moved from eleventh to ninth in 2019.
Internally, labor shortages continue to plague businesses across the globe, according to The Conference Board.
“Regardless of a company’s location or size, attracting and retaining top talent ranks as the number-one internal stressor for CEOs and other C-Suite executives globally in 2020,” the firm said. “CEOs…cite the tight labor market as their fifth-biggest external worry in the year ahead.”
Creating new, disruptive technologies to draw in talent and wax competition is the next highest priority, worldwide, followed by fostering a more innovative culture internally.
“When it comes to creating new business models because of disruptive technologies, there is more urgency among emerging-market CEOs than those in more mature economies,” Chuck Mitchell, executive director of knowledge, content and quality at The Conference Board, said. “This should raise a warning flag about possible complacency considering the current speed of disruption. The truth is that, today, companies no longer enjoy the luxury of a decades-long lead time to adapt to the digital revolution.”