A majority of CEOs in South Africa are anticipating a decline in economic growth over the next 12 months and this presents challenges for businesses, the government and individuals, necessitating cautious and adaptable strategies.

These are insights from South African respondents to PwC’s twenty-sixth ‘Global CEO Survey’.

In its new publication, entitled ‘Africa Business Agenda: South African Perspective 2023’, PwC highlights the challenges and opportunities that South Africa faces in terms of economic growth, company profitability and talent development.

The report delves into factors impacting on company profitability, including the transition to new energy sources, technological disruptors, supply chain disruption, labour shortages and regulatory changes.

Companies are urged to embrace renewable energy, adapt to new technology, fortify their supply chains and upskill their workers to ensure adaptability in a rapidly changing landscape.

SA ECONOMY

In terms of the global economic trend, only 18% of local CEOs anticipate improved economic growth, while a significant majority, 73%, expect a decline.

This indicates a prevailing sense of pessimism among CEOs in South Africa regarding the global economic landscape, PwC avers.

“CEOs in South Africa are 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 the rest of the globe 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,” explains PwC South Africa senior economist Christie Viljoen.

When it comes to slowing investments, delaying deals and reducing operating costs to adapt to a weaker economic environment, CEOs in South Africa are in line with their global counterparts, showing similar considerations or actions.

From a supply chain perspective, CEOs in South Africa are similarly inclined to find alternative suppliers, with 32% considering this compared with the global average of 33%. This may reflect a desire to diversify supply chains in an effort to mitigate risks, PwC posits.

SA WORKFORCE

Employee retention and upskilling are critical issues for companies in South Africa.

According to the survey, many companies are expecting no change or an increase in resignations or retirement rates in the next 12 months.

In South Africa, the highest percentage of CEOs, at 53%, believe there will be no change in employee resignations or retirement rates, while only 12% believe rates will increase.

Depending on the company, “no change” could mean an ongoing challenge with regard to resignation and early or unplanned retirement, but in any case it is a good idea to focus on employee engagement and satisfaction to retain top talent, PwC proffers.

SA SOCIETAL PURPOSE

The survey reveals that unemployment remains one of the most pressing issues in South Africa, affecting both the workforce and the economy.

To drive workforce development and job creation, collaboration is crucial. To build a network with the right skills, companies can collaborate with different stakeholders to create the necessary skills at an industry level, PwC emphasises.