Macroeconomic Outlook

Based on survey results, investors are strikingly more optimistic about the next six months than CEOs of large-cap companies (Figure 1). Perhaps investors are motivated by opportunities to “buy the dip” in the market over the next six months. It is also possible that the sheer complexity and uncertainty of operating large, multinational corporations in today’s environment has CEOs of large-cap companies hedging their bets. Regardless, the data raises the possibility that the market will get ahead of the economic reality in the coming months.

Question: Do you expect the global economy / domestic economy / access to capital / industry conditions / customer demand to improve or worsen over the first six months of 2023?

The outlook of CEOs from the Americas is less bearish than their counterparts in the rest of the world. 77% of CEOs from the Americas expect improvements over the first six months of 2023, compared to 16% and 11% in Asia / MENA and Europe respectively (Figure 2).

Question: Do you expect the global economy / domestic economy / access to capital / industry conditions / customer demand to improve or worsen over the first six months of 2023?

Consumer goods, financial and professional services, and tech CEOs are optimistic on market conditions heading into 2023, while counterparts in manufacturing, energy and healthcare hedge their views (Figure 3). With retail sales a likely lagging indicator, the gloomy outlook from manufacturing CEOs may point to inflation slamming the breaks on consumer spending. Factory orders could very well be the “canary in the coal mine” that consumer CEOs are not yet seeing.

It is also interesting to note that none of the CEOs representing the healthcare sector expect a severe worsening. This may speak to the resilience of the sector or the stability of government-funded revenue.

Question: Do you expect the global economy / domestic economy / access to capital / industry conditions / customer demand to improve or worsen over the first six months of 2023?