PwC’s 16th annual global CEO survey shows that engineering and construction (E&C) CEOs lack confidence this year and are worried about a range of threats, particularly around the economic situation.
Some 40% of UK CEOs see mergers and acquisisions, joint ventures and strategic alliances as an investment priority this year. Only 17% say the same of R&D.
Just 31% of E&C CEOs are very confident that they can raise their companies’ revenues over the next 12 months. A further 43% are somewhat confident that they can achive growth. Overall, the outlook of E&C bosses is a bit more cautious than their peers across the total sample.
They are also less confident looking further ahead. While most CEOs are significantly more confident when looking forward three years, that’s not true for the E&C sector. Only 35% of E&C CEOs are very confident of three-year growth, compared to 46% of the total sample.
Engineering and construction CEOs are a lot like their peers in other industries, says the report, in being somewhat less confident this year and worrying about a range of threats. But there are some differences, too. For example, they’re more concerned than peers across all industries that inadequate infrastructure will pose a threat to growth, and more likely to say that government should take action to improve infrastructure.
“The investment required in infrastructure is the backbone of economic growth," said AM Naik, executive chairman of India's Larsen & Toubro. "The government keeps saying we want to invest $1 trillion over five years, but I don’t think even half of that is happening at this point. So that needs to be revised and we also need to fill the project pipeline. Projects which were put in the pipeline three years ago are being undertaken, but fresh projects have to be planned for execution in subsequent years.”
E&C CEOs are more focused on their domestic markets than their peers are, with 41% seeing their domestic markets as the main route to growth over the next 12 months and only 9% expecting new operations in foreign markets to drive growth.
Almost half - 47% - are concerned about their ability to finance growth and 88% are worried that an uncertain or volatile economy could slow down growth.
They’re also more concerned than their peers that skills gaps could threaten growth. Nearly two-thirds of E&C CEOs say they’re worried about the availability of key skills and 37% say that “filling talent gaps” is one of their top three investment priorities over the next three years.
More about the survey at www.pwc.com/ceosurvey
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