CEOs around the globe are increasingly optimistic about the prospects of growth for their companies but are far less positive when it comes to the global economy as a whole, KPMG reported in its annual CEO survey.
The survey, released Sept. 23, was compiled from interviews of 1,300 CEOs in 11 countries. The findings showed an interesting split in opinion as 94% of those surveyed said they were positive about their own company's growth prospects, but only 62% said the same about the global economy. Issues such as the trade war between the U.S. and China, volatility in the Middle East and Brexit appear to be weighing on the minds of chief executives as they look at the global landscape.
CEOs in the U.S. are the outlier in the survey, with 87% expressing confidence in the global economy; by contrast, less than half of the CEOs polled in Australia, the U.K., France and China indicated similar sentiments.
"There's a growing disconnect between their company's growth and their confidence in the global economy. Now they're saying, 'We're ok, but the rest of you? We're worried about you,'" said Regina Mayor, KPMG's global sector head and U.S. national sector leader of energy and natural resources. "There's still underlying fundamental strength in the global economy, but there's also a jaded sense of things with these CEOs."
When asked about their greatest concerns overall, climate change topped the responses for the first time. A total of 76% of respondents said the growth of their company depends on a shift to cleaner energy sources over time.
"Senior executives are focusing on and are worried about the energy transition," Mayor said. "It's becoming more singularly focused on de-carbonization across the board."
CEOs are also increasingly focused on digitization, with 80% of those surveyed saying they were personally leading their company's strategies when it came to using new technologies. The oil and gas industry, which has historically been slower than other sectors to adapt to change, is keeping pace this time around.
"I think they've moved quickly into digital technology," Mayor said, citing drones, 3D printing and artificial intelligence as three advances the oil and gas sector has been quick to adopt. "It has been uncharacteristically aggressive in moving into new areas as opposed to a wait-and-see approach."
The use of new technologies and finding innovative ways to do business is becoming increasingly important to CEOs as 67% of those polled agreed with the sentiment "acting with agility is the new currency of business," up from 57% in 2018. While oil and gas executives largely agreed with the idea, "agility" takes on a different meaning in the sector.
"[Companies] have to take big, long-term bets that take four to seven years to play out. They can't be capricious about moving capital expenditures around," Mayor said. "It means being more agile around short-term processes: paying attention to your employees, the communities where you do business and geopolitical risk."
