30 Mar 2023
Bucharest, 30 March 2023 Half (52%) of Romanian CEOs are confident about the revenue growth prospects of the companies they lead in the coming year, according to the PwC CEO Survey 2023. At the same time, a quarter of respondents (27%) believe their organisations will not survive a decade from now if they continue on their current course and do not make decisions to transform their companies.
The most important factor that will affect their long-term profitability is the workforce and skills shortage, 70% of respondents say, with other threats being: changing consumer preferences, regulatory developments, the emergence of new technologies, the transition to new energy sources and supply chain disruptions.
"Business leaders face a number of urgent threats and risks that have accumulated over the past two years and which they must address, and at the same time they must think strategically about the future, about how to reinvent their businesses to remain viable in the long term. The big challenge is how they will find the balance, how they will mitigate today's tensions while making decisions for organisational transformation. The survey also gives us good news, as it is encouraging that 60% of the investments they make are aimed at reinventing companies, and 40% are focused on current consolidation", said Dinu Bumbăcea, Country Managing Partner PwC Romania.
In the short term, about three quarters of respondents (73%) plan to invest in process automation, new technologies and employee development.
Top three concerns: inflation, macroeconomic volatility and geopolitical conflicts
Romanian executives perceive inflation as the main risk to business development in the coming year (48%), followed by geopolitical conflict (42%) and macroeconomic volatility (38%).
The picture changes slightly when the time horizon widens - with macroeconomic volatility becoming the most important concern over the next five years, followed by inflation and geopolitical conflict. More than a third of Romanian CEOs feel high or very high exposure to each of the three risk factors.
Reduce costs, but avoid layoffs or reduced investment
In response to short-term economic challenges, executives say they are taking steps to boost revenue growth and reduce costs. As a result, 92% say they are already reducing operating costs or plan to do so in the next 12 months. However, around two-thirds of Romanian CEOs say they are not considering layoffs, while the other third of those surveyed say they have started a layoff programme or are planning to do so (the percentage globally is even higher, at 39%). By a similar measure, around three in five CEOs say they are not considering a hiring freeze.
As regards a possible postponement of investments, the share of Romanian CEOs who say they are maintaining the pace of investment (52%) is higher than those who say they have initiated or plan to decrease investments (44%).
Germany remains the most attractive foreign market
Compared to last year's survey, changes can be seen in the preferred destinations of Romanian CEOs for the overall development prospects of their companies. For Romanian business leaders, Germany has been the most attractive foreign market for growth opportunities for several years. The United States ranks second, as it did a year ago, followed by France, Austria, Moldova, Hungary and Bulgaria, up from previous positions. China dropped this year in the ranking of destinations considered favourable for growth by our country's CEOs from third place in 2022 to second last. Poland re-enters the top ten most important export markets, while Russia drops out of the ranking.
Other findings of the report
The PwC CEO Survey explores the perceptions of CEOs in Romania on the evolution of the economy, prospects, challenges and development opportunities for the organisations they lead. A summary of this year's respondents' views can be found in the PwC Romania CEO Survey report.
In order to gain a deeper understanding of company leaders' views on the economy and business, we conducted a series of interviews for the report's "Inside the mind of the CEO" column with: Omer Tetik, CEO Banca Transilvania, Andreea Pipernea, CEO NN Pensii,
Cătălin Radu, General Manager Bristol Myers Squibb, Mihaela Bîtu, CEO ING Bank, Julien Munch, CEO Carrefour, Raffel Volker, CEO E.ON Romania, Sergiu Manea, CEO BCR, Francois Bloch, CEO BRD Groupe Société Générale and Călin Costinaș, Deputy CEO Profi Rom Food. The full interviews are published in the CEO Survey report here and on the PwC Romania blog here.
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 152 countries with nearly 328,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
© 2023 PwC. All rights reserved.
Country Managing Partner