While predictions of an oncoming economic trough are plentiful, new data based on an extensive global survey of CEOs may be especially eye-opening.

In PricewaterhouseCoopers’ 23rd annual study of chief executives around the world, conducted about three months ago, 53% of the 1,851 participants predicted that global economic growth would decline in 2020.

Since 2012, when PwC began asking about prospects for growth in the coming year, this was the first time more than half of CEOs anticipated lower growth. And the proportion who did skyrocketed from 29% entering 2019 and just 5% the year prior.

Nowhere has the swing in CEO confidence been more pronounced than in North America, where 63% of survey participants predicted declining growth.

Further, only 27% of the CEOs said they were “very confident” in their own organizations’ prospects for revenue growth in 2020 — the lowest level since 2009, when the economy had barely begun its recovery from the global financial crisis.

As noted, this data isn’t necessarily surprising. So, why is it significant enough to report?

PwC performed a statistical analysis of prior years’ survey responses and found that CEO attitudes are quite accurate in predicting both the direction and the strength of the global economy.

Specifically, the year-to-year change in their confidence regarding their own organization’s revenue growth prospects correlates strongly with actual global economic growth in the year following the survey. “Indeed, CEO revenue confidence can be said to be a leading indicator of global economic growth,” PwC said in its survey report.

According to PwC’s analysis, the level of CEOs’ current pessimism suggests that global growth could slow to 2.4% in 2020 — well below the International Monetary Fund’s forecast of 3.3%.

The report suggests that the principal factor accounting for expectations of declining growth may be what John Maynard Keynes called “animal spirits” — the human instincts, proclivities, and emotions that can drive financial decision-making.

“The uncertainty that looms over decision-making on virtually every front can dampen animal spirits,” PwC wrote.

The surveyed CEOs rated uncertain economic conditions as the third-greatest threat to business for 2020. More than a third (34%) of participants said they were “extremely concerned” about it, slightly trailing over-regulation (36%) and trade conflicts (35%).

A year ago, uncertain economic conditions came in 12th on the list of threats perceived by CEOs, with 24% saying they were extremely concerned.

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