UK ranked second-best investment target by global CEOs
The UK has been ranked as the second most attractive country to invest in by global CEOs, behind only the US, as British CEOs feel confident about growth in the country’s economy.
This is the first time that the UK has been ranked second in the 28-year history of PwC’s CEO Survey.
“Our CEO survey findings are a vote of confidence in the UK as a place for business and investment,” said Marco Amitrano, senior partner at PwC UK.
“The UK’s relative stability at a time of instability should not be underestimated, nor should its strength in key sectors including technology.”
14 per cent of CEOs said that the UK, which placed fourth last year, will receive the greatest proportion of planned international investment.
This compares to 30 per cent for the US, 12 per cent for Germany, nine per cent for China and seven per cent for India.
61 per cent of UK CEOs said they were optimistic about economic growth in Britain over the next year, up from 39 per cent at the end of 2023, and were also slightly more positive on the global outlook (64 per cent compared to 58 per cent globally).
However, longer-term confidence in the businesses they manage has declined, with only 57 per cent feeling very positive about their organisation’s prospects over three years, compared with 61 per cent before.
The sentiment among global CEOs looking at investment destinations is in contrast to the views expressed in many of the most recent economic surveys, including those conducted by the Bank of England, which have consistently shown concern over the UK government’s tax hikes and increase in employment costs and regulation. Most firms are planning to increase prices and cut costs where possible.
Among UK CEOs, there has also been a shift in their planned investment targets, with interest in China falling rapidly, while interest in Australia has increased substantially.
The shift also comes as CEOs are increasingly looking to invest in new markets, with over a third stating they have started to compete in new sectors in the last five years to stay competitive.
Meanwhile, two thirds of UK CEOs are developing new business capabilities or operating models in the pursuit of growth, including investing in generative AI.
“While many UK businesses have adopted GenAI to some degree, those degrees will vary enormously,” said Amitrano.
“There is a big difference between letting employees experiment with AI and embedding it into core business processes. UK business has begun to move beyond the initial hype of GenAI to the reality of making it work – but that shouldn’t detract from its huge unrealised potential.”
However, while 49 per cent of CEOs globally said they expected generative AI to increase profitability at their firms in the next year, only 36 per cent of UK CEOs were confident.