Energy CEOs are bullish on individual company growth but see challenges for the industry's overall revenue growth on a number of fronts, a PwC survey finds.
Eighty-eight percent of energy CEOs are somewhat or very confident on growth opportunities for the industry over the next three years – with more hopeful that the global economy will improve over the next year – but concerns remain that growth could be impeded on several fronts, including the industry’s public image and increasing regulations and taxes, according to PwC’s 17th Annual Global CEO Survey.
The survey found that 39 percent of energy CEOs are optimistic for growth over the next 12 months, and 41 percent said they were “very confident” in their company’s growth over the next three years. However, only 15 percent of energy CEOs told PwC they were “very confident” for their industry’s revenue growth prospects over the next three years as the industry faces major challenges in finding and producing new reserves.
More energy CEOs believe the global economy will improve over the next year, and fewer expect the global economic situation to worsen during the next 12 months. However, 66 percent of energy CEOs were concerned about continued slow or negative growth in developed markets. This concern ranked higher than concerns about a high-growth market slowdown, reflecting the continued importance of mature markets, PwC noted.
Energy CEOs are taking public image and stakeholder trust seriously, PwC found in its survey. Fifty-six percent of energy CEOs surveyed expressed concern that lack of trust in business could threaten growth. Ninety-five percent agree that promoting a cultural of ethical behavior is critical, while 88 percent believe measuring and reducing their environmental footprint as important.
While 51 percent of energy CEOs agreed that stakeholder trust has improved among employees, and among customers and creditors, 36 percent of energy CEOs saw a decline of trust in the sector by the media. Forty-two percent of energy CEOs surveyed reported seeing declining government trust in their industry. Both percentages were higher for the energy sector versus the overall survey pool.
Fifty-four percent of energy CEOs said they were “extremely concerned” that excessive regulation could negatively affect growth. That percentage is higher than the 38 percent for the overall group surveyed.
“Most don’t feel it’s helping improve production and/or service delivery quality standards,” PwC reported. “And energy executives are concerned about the impact of government may have in other ways too.”
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