In September 2021, PwC Malta rolled out its first CEO Confidence Tracker in which over 50 CEOs of the top local companies participated. The survey gauged the CEOs’ outlook for the following half a year. Five months in, how have their predictions fared?
Half of the CEOs who participated in the 2021 survey held a very conservative outlook for the last quarter of that year and the entry months of 2022, and anticipated that in the forthcoming months their businesses would fare broadly on the levels of the time. One third (34%) were positive, and suggested that their business is expected to recover further, while 16% said they thought they would do worse.
Five months have now elapsed, and the CEOs’ predictions appear to have been broadly accurate. Half reported that their businesses performed on the levels of the past 6 months. 27% reported better-than-predicted results, while 23% reported worse-than-predicted numbers.
The feedback emanating from the latest run of the confidence tracker suggests lower business levels when benchmarked to the previous quarter, arguably in view of the adverse developments connected to the COVID-19 pandemic which have been experienced during the festive period, when business typically is expected to peak.
The backdrop to the September 2021 CEO confidence tracker was the roll out of a number of support measures, such as wages supplements, loan guarantees and vouchers which propelled business levels during the unprecedented distress brought about by the COVID pandemic. In the latest confidence tracker, 27% of CEOs reported a better performance over the past quarter (compared to September’s 52%), whereas 23% stated they performed worse (compared to only 8% in September). On a positive note, the number of CEOs that stated performance had been the same rose from 40% in September to 50% in January.
What is the outlook of Malta’s top CEOs? In a signal that the local business community wishes to consign the COVID-19 pandemic to history, the majority of CEOs participating in the confidence tracker, 57% hold a stable business outlook for the next 6 months. This represents an increase from the equivalent 50% in the previous quarter. A third (33%) are optimistic and anticipate that businesses will perform better – and this is consistent with the outlook expressed in the previous quarter. Only 10% hold a negative outlook – and this, when benchmarked with the previous quarter mark, which stood at 16% - also signals an increasing level of confidence.
Such levels of confidence are expected to be under stress again given the new local and international developments. The confidence tracker predates the announcement of a general election at the end of March – and intense political campaign activity which anticipates this - which was being nonetheless anticipated and more significantly, the surprising news of turmoil which was unleashed in the Eastern Europe and which is likely to push the EU and global economies, to yet another unchartered territory, in a time when business was reeling from the effects of a devastating pandemic.
PwC Malta’s CEO Confidence Tracker aims to track business sentiment levels on a quarterly basis by soliciting feedback from Malta’s top CEOs in a wide range of industries, namely Financial services, Construction, Gaming, Hospitality, Import & Distribution, Retail and Manufacturing.