CEO Survey: U.S. Pulls Further Away from China as Top Market for Growth

Trump wins Davos raves for 'landmark' tax cut
AFP/Fabrice Coffrini

Chief executives from many of the world’s largest companies are gathered in Davos, Switzerland, for the annual World Economic Forum meeting, and they are feeling highly confident about global growth–especially growth in the United States.

The U.S. is pulling ahead of China as the top market for investment, according to the latest annual survey of nearly 1,300 chief executives by PwC, the professional services firm. PwC released the results of the survey in Davos as the conference kicked off.

Forty-eight percent of the surveyed executives named the U.S. as one of the three top stops for their companies’ growth prospects of the next twelve months, up from 43 percent a year ago. The second-ranked country, China, held steady at 33 percent, which means the gap between the U.S. and China widened to 12 points. Germany took third place, with 20 percent, up three percentage points from a year ago.

Interestingly, despite all the wailing and whining over Brexit, the U.K. held on to the fourth spot with 15 percent of the vote. India moved up from the fifth spot, trading places with Japan, which is now ranked sixth.

China was considered the top spot for growth until 2015, when it fell behind the United States. The survey does not allow CEOs to vote for their home country, so the rise of the U.S. is not due to patriotic American executives upvoting their country.

“Foreigners who want to succeed in the U.S. market want to build plants there,” global business adviser and author Ram Charan told PwC. “The corporate tax cut will likely accelerate foreign direct investment in America, especially from Europe and Japan.”

In general, chief executives are feeling very optimistic. Fifty-seven percent of CEOs say global economic growth will improve during the next 12 months, the first-time “improve” has outranked “stay the same” since the survey’s genesis in 2012. The boost in this year of rising economic nationalism is notable, with twice as many CEOs saying they expect economic improvement than last year.

Optimism is highest in the United States. North American CEOs–which includes Canadian CEOs–have never been more optimistic about the near-term prospects of their companies, according to PwC. A note of caution is warranted: the last time North American CEOs were this optimistic was 2007, the year before the global financial crisis.

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