Two reports out today, tied to the beginning of the World Economic Forum in Davos, Switzerland.
The first is the PwC CEO survey, which covers 1,378 CEOs around the world and is the most comprehensive such survey I know of. It shows that pessimism is rising among this normally optimistic group. Among the findings:
– There was a sharp rise in the number of CEOs who say the economy will decline in the next 12 months, hitting 29%, up from 5% last year. Still, 42% think the economy will improve (down from 57% last year.)
– While the rise in pessimism was found in every region of the world, it was most pronounced in North America. Trade conflict was a top reason for rising pessimism in both North America and China.
– The U.S. fell sharply as the top target for companies’ growth ambitions, going from the choice of 46% last year to just 27% this year. It still topped second-place China, which fell from 33% last year to 24% this year. This suggests trade tension is hurting growth prospects in both countries.
– The U.S. is no longer top territory for overseas investment and growth for Chinese CEOs. It dropped precipitously from the top choice of 59% of Chinese CEOs last year to just 17% this year and fell behind Australia.
– A majority of CEOs now believe AI will have a larger impact on their business than the Internet.
Also out is the annual Edelman Trust Barometer, based on a separate global survey, which offered a bit of good news: trust in all institutions — business, NGOs, government, media — rose modestly from last year. That said, it’s not entirely positive either, as only one in five of those surveyed believe the “system is working for me.”
The Edelman survey also showed a sharp rise — up 11 points to 76% — in the percentage of people calling on CEOs to take the lead in creating positive change, particularly in the areas of equal pay, prejudice and discrimination, and worker training.
I’ll be reporting from snowy Davos all week — and hopefully skiing at the week’s end. Other news below.
China’s annual growth last year was 6.6%—its slowest rate since 1990. Forecasts roughly predicted this, and Beijing has not sought to hide the problem—indeed, it’s trying to stimulate the economy—but people are nonetheless worried about the potential impact on the global economy. BBC
Carlos Ghosn has made a new bail application in which he offers to wear an ankle bracelet, pay for his security and surrender his passports. Ghosn is in a Tokyo jail awaiting trial for massively understating his compensation, misusing company funds and transferring personal losses to Nissan—all charges he denies. Wall Street Journal
House Democratic Whip Jim Clyburn of South Carolina has suggested a way to end the government shutdown impasse: Trump could get some more money for barriers on the southern border if he provides a “permanent fix” for undocumented “Dreamers”—rather than the three-year reprieve the president has offered. Bloomberg
Trump’s lawyer, Rudy Giuliani, now says the soon-to-be-president was pursuing his Moscow Trump Tower project—and talking to Michael Cohen about it—all the way up until late 2016, when he was closing in on the Oval Office. However, Special Counsel Robert Mueller’s office has disputed elements of a Buzzfeed piece that claimed Trump directed Cohen to lie to Congress about the real-estate deal. Reuters
Around the Water Cooler
British Prime Minister Theresa May has reportedly all but given up on the potential success of cross-party talks, aimed at breaking the Brexit deadlock in the U.K.’s parliament. Her time may soon be up—lawmakers are planning to force her to soften her “red lines” on Brexit and possibly delay the exit day. (P.S.: She seriously took her defeated plan and re-presented it to the EU, with no changes.) Bloomberg
The Indian government has proposed new rules on the spread of misinformation via social media. The changes would force the likes of Twitter and Facebook to censor information that the government does not like, as well as compelling them to turn over private messages if requested to do so. Civil liberties advocates are not thrilled. Fortune
The Chinese drone manufacturer DJI has uncovered a series of frauds perpetrated by dozens of its employees, who “inflated the cost of parts and materials for certain products for personal financial gain.” DJI may lose as much as $150 million through the frauds, over which it has sacked 29 workers. CNN
The German power utility E.ON is working with Nissan on making it possible to sell electricity stored in vehicle batteries back into the grid. France’s EDF and Italy’s Enel are also working on the “vehicle-to-grid” (V2G) concept, and everyone would now like European carmakers to build the same capabilities into their products. Reuters