2022 was riddled with crises that had dramatic effects on planning at many companies. There has not yet been a new crisis in 2023. Yet economic expectations among top managers for the current fiscal year are rather sobering.
A large number of the more than 430 international board members we interviewed in person for our CxO Priorities Study do not expect any real growth this year – on average they forecast meager revenue growth between zero and five percent. Taking inflation rates into account, it becomes clear that this is not real growth, but nominal growth. Across industries, only about half of CxOs expect revenue growth above five percent. One in ten companies even expects revenues to fall.
Industry comparison reveals enormous differences
A closer look at individual industrial sectors shows that there are definitely differences. The energy sector is the most optimistic, with 82% of respondents expecting relevant revenue growth. Insurance companies are also anticipating a positive revenue trend. Premium increases of around four percent are expected on average. Banks and other financial institutions are even forecasting an increase of just over seven percent. The Travel & Transport sector is experiencing an upswing due to catch-up effects, with two-thirds planning revenues to increase. Managers in the telecommunications and mechanical engineering sectors, including electrical engineering, are similarly optimistic, with a positive outlook for the future due to high order backlogs. In the automotive sector, 60 percent of companies are planning to increase revenues. They expect to gain + 7,5 percent on average.
But there are also less optimistic sectors. Oil and chemical companies as well as the metal industry and retail are being hit hard. Depending on the sector, 40 to 50 percent of top managers expect declines – the raw materials industry is even more pessimistic than the retail sector.