When the once-in-a-century COVID pandemic hit, central banks responded by flooding the market with liquidity while governments splurged in an all-out bid to stave off an economic meltdown.
Since 2020, Fortune and Deloitte have collaborated on a survey to understand CEO sentiment. To monitor challenges faced by the C-suite, in January 2022 we began asking CEOs from the Fortune 500, Fortune Global 500, and other select executives how they felt about the future of the world’s economy.
And while CEOs initially expressed confidence the first time we asked that question, pessimism has been consistently the prevailing sentiment on the floors of multinational corporations. In the previous October 2023 survey, no less than 48% of CEOs believed conditions would deteriorate over the coming year, the bleakest turnout in 12 months.
The hard landing that so many anticipated, however, never occurred. The U.S. led most of its peers with robust growth, and our latest data suggests many executives managing the largest companies in the world now feel great about the future of the global economy.
The Big Picture
Over a quarter of CEOs surveyed expressed optimism, by far the highest number over the past 12 months. Meanwhile, the share of those on the bearish end of the spectrum halved. The change of heart is likely thanks to expectations central banks are done tightening policy and interest rates will soon come back down.
The numbers to know
27%…of CEOs are bullish about the future of the global economy over the next 12 months. That’s a full 20 percentage points higher since the last survey when just 7% felt positive.
24%…of CEOs are pessimistic, a sharp improvement over 47% previously. What’s more, no one answered they were “very pessimistic” this time.
22%…of CEOs couldn’t possibly be any more positive about the outlook for their own company, just over twice as many as before.
76%…of CEOs expect interest rates to ease by the end of September. Yet only 28% anticipate a move in the second quarter already—despite financial markets pricing in a likely first cut in June.
56%…of CEOs said their companies are using generative AI to make their companies more efficient, up from 39% in the previous survey.
Economic Confidence
As well as feeling more confident in the global economy, CEOs also are more secure in their own companies’ prospects. The percentage answering they were “very optimistic”—the most positive response available in the survey—more than doubled to 22% from just 10% in October 2023.
Inflation fears diminished further, with the share of CEOs citing it as one of their top three concerns dropping to 27% in the current survey from 51% previously. That decline came despite inflation remaining sticky, preventing the Fed from declaring victory and leaving it in a watch-and-wait stance.
Risks related to financial instability also declined in the eyes of corporate leaders. Only 27% of CEOs identified this as a major disruptor to their business strategy, down from 38% in the previous survey.
Power struggles
The main concern dominating responses revolved around the potential for regional disputes to affect business. This is not too surprising following the Oct. 7 attack on Israel; instability in the Middle East recently disrupted the flow of goods along the critical Suez Canal shipping route.
Data showed 65% of CEOs felt geopolitical concerns are one of the three most significant disruptors they expect to face over the coming 12 months, up from 51% in the last survey.
When prodded for specifics, several CEOs expressed anxieties over the U.S. election in November. In the event he is elected, Donald Trump’s plan to hike minimum import tariffs to 10% from roughly 2% currently could exacerbate trade tensions even with close allies as well as reignite inflation.
CEOs are also increasingly worried about broader issues of trust, for example, worker loyalty and misinformation. This category has seen a steady increase in responses over the last three surveys, doubling to 25% from last January.
Companies are heating up on AI
Gen AI, tech’s hottest trend is enjoying enthusiastic support in the boardrooms of Fortune 500 companies. When asked what was the “next big thing” that could impact their business in the coming year, by far the largest share of CEOs identified this productivity-boosting technology over other common responses, such as the U.S. elections.
Indeed, data suggests the adoption of gen AI is only accelerating. CEOs reported increased implementation in eight out of nine areas surveyed compared with the previous survey.
Tools that automate manual tasks and improve efficiency are notably high growth areas, with adoption rates jumping to a respective 58% and 56%, up from 40% and 39% previously.
The automation of content generation, too, fared strongly, rising to 50% from 33% last quarter. That increased significantly more than the number of companies reporting the use of gen AI to write new code. There, implementation rates increased just 7 percentage points to 42%.
Notably, shifting workers from more menial tasks to higher-value ones is not a core benefit CEOs aim to achieve with gen AI, according to their survey responses. The data suggests they hope first and foremost the technology will cut costs and empower workers to be more productive, closely followed by improving existing products and services.
Robert Stevens
*Methodology: Fortune surveyed CEOs in collaboration with Deloitte between Feb. 13-23. A total of 107 responded to the survey, which was sent to the Fortune CEO Community. That includes chief executives from Fortune 500 and Global 500 companies as well as those attending Fortune conferences.
