Pessimism of CEOs on development of economy and business hits record high, as they optimise costs and invest in the future

The Most Respected CEO 2022 Award went to Peter Krutil, Board Chairman and CEO of Slovenská sporiteľňa

Bratislava, 15 March 2023 – 46% of CEOs in Slovakia and 39% of CEOs globally say that their organisations will not be economically viable in a decade if they continue on their current path. This issue, which was commented on by 142 CEOs in Slovakia and 4,410 CEOs from 105 countries, is one of the most important in PwC´s latest CEO survey.

At the Slovak CEO Discussion Forum held on 15 March 2023, where business leaders discussed the CEO survey results, Peter Krutil, Board Chairman and CEO of Slovenská sporiteľňa, received The Most Respected CEO 2022 Award, based on the vote of the Slovak CEO survey respondents. The award has been presented by PwC and Forbes since 2013. In past years, it has been awarded to Richard Marko, Vladimír Soták, Igor Vida, Tomáš Drucker, Štefan Rosina, Šimon Šicko and Peter Krutil.

The CEO survey shows it is extremely important to reinvent business models that will be continue to be successful in the future. CEOs are also seeing major short-term challenges to the economy development, with three-quarters of them expecting a decline in the coming year.

Pessimism of CEOs´ in Slovakia on development of economy and business growth hits record high

The biggest short-term challenge CEOs face is the development of the economy. Unsurprisingly, nearly 68% of CEOs in Slovakia and 73% of CEOs globally expect global economic growth to slow in the next 12 months. These expectations are true across all major economies, and represent a significant turnaround from last year, when a similar proportion (73% of CEOs in Slovakia) expected global growth to accelerate. Last year´s optimism prior to the start of the war in Ukraine reflected the hope that economic conditions would continue to improve as the pandemic receded. Over the last year, however, geopolitical uncertainty, soaring energy and commodity prices, rising wage costs and inflation have substantially altered expectations. CEOs in Slovakia have even less confidence in the growth of the local economy than in the global economy. Up to 74% of CEOs in Slovakia expect the Slovak economy to decline, while in other countries globally the average is 59%, and 65% in Central and Eastern Europe countries.

CEOs are implementing cost-cutting measures, optimising costs, and looking to increase revenues – but are not planning to cut salaries, reduce headcount or delay deals

Optimisation in organisations is in full swing; up to 90% of CEOs in Slovakia are planning to reduce/are reducing their operating costs, 84% are planning to raise/are raising prices of their products and services, 76% are searching for alternative suppliers and diversifying their product and service offerings. CEOs are reevaluating their ongoing projects (67% of CEOs in Slovakia) and slowing investments (47%).

Labour and skill shortages were identified by most CEOs in Slovakia (95%) as the factors most likely to affect the profitability of their industry over the next decade. In second and third places, they cited changing customer demand and preferences, and supply chain disruptions. They also cited changes in regulation, revolutionary advanced technologies, and new market entrants from adjacent industries in that order. The least CEOs in Slovakia, only 56%, referred to transition to new energy sources.

CEOs are planning to invest in future technology

Up to 81% of CEOs in Slovakia are planning to invest in process and system automation in the next 12 months, 79% in further education and improving workforce skills in priority areas, and 65% in introducing new technologies (cloud, AI or other advanced technologies). In total, approximately 60% of investment is related to redefining and changing company´s business model and focus, while 40% of the surveyed CEOs want to keep their current business model.

CEOs in Slovakia consider the quality of education to be a threat comparable to the inflation threat

In Slovakia, the factors that threaten business success remain unchanged from each of the previous years, namely energy prices, the quality of the education system, and inflation in that order. This is followed by the increasing tax and levy burden, which is one of the top threats to business every year. The survey showed a new factor of concern – political instability, the influence of extremist political parties and law enforcement.