In the latest PwC Economic and Business Consensus, a majority of experts, executives, and business leaders — 56.1% — indicate demand remains below levels needed to lift production. About one third, 32%, say the gap is due to a shortage of skilled workers. These insights come from a quarterly survey conducted by PwC with a panel of 450 professionals, with 114 responses gathered between February 19 and March 8, 2024.
On macroeconomic matters, participants are somewhat more optimistic. They project GDP to rise by 1.7% in 2024 and to 1.9% in 2025. More than half of the respondents anticipate policy rates staying below 3.5% by June 2025. Activity growth forecasts have been revised upward for the coming months by both experts and managers.
The shift signals a clear change in mood from late last year when sentiment was gloomier. The share who view the current situation as good increased from 32.6% to 45.9%. Meanwhile, expectations for better or same conditions in the second quarter of 2024 rose by more than 70%. Looking ahead to 2025, 82% expect activity to increase at a pace similar to this year.
rate drop
The upbeat outlook is partly driven by anticipated reductions in the European Central Bank rate. About half of the panel, 53%, foresee three to four cuts of 0.25 percentage points between now and June 2025, bringing the federal money rate below 3.5% from its current 4.5%. The view rests on continued easing inflation and the ECB’s response to the German recession, while inflation in Spain is expected to finish 2024 around 2.5%.
Turning to households, only 28% feel they are faring well, while 66% believe current conditions will remain normal over the next six months. Inflation and higher borrowing costs push up the cost of living, affecting households the most. Yet 64% of respondents expect consumption to stay steady with a modest uptick in housing demand. Those forecasting a decline in housing demand fall from 74.7% to 40%. Company sentiment toward the economy shows a split: 52% rate the current situation as good and 48% as fair, with most expecting stability in the next quarter.
Artificial intelligence
This edition centers on the views of experts, business leaders, and managers about productive AI and its impact on work. Although many have not yet integrated AI into daily routines, up to 77.2% foresee a substantial boost to productivity and 65.3% anticipate effects on the labor market. They also note that AI adoption is unlikely to widen social inequality in the near term. Real gains in cost reduction, operational efficiency, and benefits in product and service development are modest at present, seen in 16%, 8.5%, and 5.3% of respondents respectively.
Related news highlights that many companies are still in early adoption stages for generative AI. About half report no action yet, while 21.3% say they have begun testing productive AI and 26% are prioritizing training and empowering staff. The main hurdles executives identify include integrating AI within existing systems, managing cultural change, and attracting the talent needed to deploy AI effectively.
Nearly half, 42.9%, believe AI will not eliminate jobs, while 22% expect job reductions to stay under 10%. About 53.1% doubt that AI will reshape certain roles or trigger workforce restructuring. Almost 60% emphasize that clear regulation is essential to ensure ethical and responsible AI development. These views reflect a cautious but growing recognition of AI as a driver of productivity without a sudden, disruptive shift in employment models.