Confidence of global CEOs back to pre-pandemic levels

Web DeskWeb Editor

07th Sep, 2021. 11:57 am

DUBAI: Confidence among chief executives across the globe is returning to pre-pandemic levels, with eight out of 10 expressing a willingness to launch aggressive M&A plans in the next three years, Khaleej Times quoted a new KPMG report, as saying.

While uncertainty remained due to the Delta variant of Covid-19, 60 per cent of corporate leaders were confident about the global economy over the next three years, up from 42 per cent in a similar survey in early 2021, the leading accountancy firm said.

“Despite the continued uncertainty around the pandemic, CEOs are increasingly confident that the global economy is coming back strong,” Bill Thomas, KPMG’s global chairman and chief executive, said.

“This confidence has put leadership in an aggressive growth stance. While inorganic growth strategies are a priority, chief executives are also looking to expand organically and continue to assess the future of work to ensure they can attract top talent,” said Thomas.

The CEOs saw cybercrime, climate change and supply chain risks as the biggest threats to growth, the survey showed. More than half of the respondents said their supply chains had come under stress as a result of the pandemic.

Almost 80 per cent said a proposed global minimum tax system was of “significant concern” regarding their growth goals.

“I am encouraged about what the future holds because business leaders are acknowledging that they need to be the drivers of positive change, supporting measures to tackle environmental dangers, as well as societal challenges, from gender and race to equity and social mobility,” said the KPMG boss.

In contrast to the August 2020 report, when more than two thirds of respondents said they planned to cut their office space because of the pandemic, only 21 per cent in the new survey said they were planning to downsize.

Almost 40 per cent had implemented a hybrid work model for staff with most employees working remotely two or three days a week.

KPMG surveyed 1,325 chief executives of companies with annual revenues of more than $500 million in Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, Britain and the United States between June 29 and August 6.

Moreover, the prospect of a stronger global economy is leading chief executives to invest in expansion and business transformation, with 69 percent of senior executives identifying inorganic methods, such as joint ventures, M&A and strategic alliances, as their organisation’s main strategy for growth.

In terms of M&A, KPMG reveals that a majority (87 per cent) of global leaders stated that they are looking to make acquisitions in the next three years to help grow and transform their businesses.

Another positive noted by the KPMG report is a greater focus on environmental, social and governance (ESG) among leaders. “If there is a positive to come out of the past 18 months, it is that chief executives are increasingly putting ESG at the heart of their recovery and long-term growth strategies. The unfolding climate and societal crises have made it clear that we need to change our ways and work together.”

To this end, the report highlights that 30 per cent of chief executives plan to invest more than 10 percent of their revenues into sustainability measures and programmes over the next three years.

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