The majority of CEOs in South Africa are anticipating a decline in economic growth over the next 12 months, according to PwC’s 26th Global CEO Survey released yesterday.
The information is contained in PwC’s 26th Global CEO Survey. Its new publication, entitled “Africa Business Agenda: South African Perspective 2023”, highlights the challenges and opportunities that South Africa faces in terms of economic growth, company profitability, and talent development.
The report looks at company profitability, including the transition to new energy sources, technological disruptors, supply chain disruption, labour shortages, and regulatory changes.
According to the report, 26% of respondents locally believe there will be an improvement in South Africa’s economic growth. However, the majority of 59% anticipate a decline in growth, aligning with the prevailing sentiment of economic uncertainty in the country.
“This suggests that while there is a slightly less pessimistic view of the local economy compared to the global economy, there is still a notable concern about the challenges and potential decline in economic performance in South Africa,” the report found.
However, in terms of the global economic trend only 18% of local CEOs anticipate improved economic growth, while 73% expect a decline.
“This indicates a prevailing sense of pessimism among CEOs in South Africa regarding the global economic landscape,” it said
PwC South Africa senior economist Christie Viljoen said CEOs in South Africa were slightly less pessimistic about the global economic outlook, with 24% anticipating improvement compared to the global average of 18%.
“However, respondents from South Africa and globally share a similar level of concern about their respective territory’s economic trends, with 59% of CEOs from both groups expecting a decline in economic growth this year,” Viljoen said.
The report found that in terms of reducing the workforce, CEOs in South Africa were slightly more conservative, with only 15% considering this action compared to the global average of 23%.
“Similarly, implementing hiring freezes is also less favoured among respondents in South Africa, with only 6% considering it compared to the global average of 24%.
“This indicates a more cautious approach to workforce management in South Africa,” it said.
Interestingly, a smaller percentage of CEOs in South Africa are planning to reduce compensation, with only 3% considering it compared to the global average of 13%.
“This may indicate a focus on retaining talent and maintaining employee morale, despite economic challenges. Overall, the data highlights a more conservative approach to workforce reduction and hiring freezes in South Africa compared to the global average,” the report said.
Employee retention and upskilling were critical issues for companies in South Africa and across sub-Saharan Africa. According to the survey, many companies are expecting no change or an increase in employee resignation/ retirement rates in the next 12 months.
“In South Africa, the highest percentage of CEOs (53%) believe that there will be no change in employee resignation/retirement rates, while only 12% believe that rates will increase.
“Depending on the company, ‘no change’ could mean an ongoing challenge with regard to resignation and early/unplanned retirement, but in any case it is a good idea to focus on employee engagement and satisfaction to retain top talent,” it said.
The survey reveals that 79% of CEOs in South Africa are planning to invest in upskilling their workforce in priority areas, which is higher than the global average of 72%.
“This indicates a recognition of the importance of investing in human capital and nurturing the skills needed to drive innovation, growth, and competitiveness,” the report found.
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