BY Fraser Tennant
The UK is an important country for growth, with Brexit and uncertainty surrounding the future relationship with the EU doing little to deter investors, according to a new PwC report published this week.
The report, ‘Inside the mind of the investor… What’s next?: Global survey of investor and CEO views’, based on interviews and data from over 550 global investment professionals and over 1300 chief executives, reveals that the UK moved up from fourth place in last year’s survey to equal third with Germany this year, behind only the US and China.
Other key findings in the report include: (i) London being viewed as the second most important city for growth prospects over the next 12 months, behind New York and followed by Beijing, Shanghai and San Francisco; (ii) investors focused on the technology and financial industries, putting the UK among the top three countries for growth; and (iii) 45 percent of investors and analysts say they were very confident about global economic growth (compared to 22 percent in the 2016 report).
“It’s striking that the UK is now seen as more important for growth, particularly by investment professionals, moving up from fourth place last year to joint third place with Germany this year,” said Hilary Eastman, head of global investor engagement at PwC. “Importance could be interpreted in a positive light – that the countries selected would be those expected to grow most or fastest.”
“On that basis, the Brexit vote and all the uncertainty surrounding the UK’s future relationship with the EU appear not to be deterring investors. However, some investment professionals saw that ‘importance’ could also be interpreted in a negative sense – that problems and greater volatility in the UK, for example, could have an important effect on slowing down companies’ growth.”
The report also notes that investment professionals perceive geopolitical uncertainty to be the top threat to company growth prospects, with protectionism, the future of the eurozone and social instability also ranked highly. In addition, almost one in five of think technology will completely reshape competition within five years, while 85 percent expect automation to reduce company headcount.
Ms Eastman concluded: “Investment professionals around the world are upbeat about global economic growth prospects, despite recognising the shifting political landscape in which companies operate. But investors do think it is becoming harder for business leaders to balance competing in an open global marketplace with trends toward closed national policies.”