CEOs in Australia display a positive approach to changes in economy
CEOs in Australia appear to be relatively unphased by the economic uncertainty currently prevalent in the economy, as most appear to be optimistic about their growth prospects in the near future. This is gauged from the Australian responses in KPMG’s global CEO survey.
Sentiment amongst Australian executives is not only in contrast with the current economic scenario in Australia, but is also different from the relatively damp outlook amongst CEOs across the globe. In recent years, an entirely new cohort of challenges has come to plague global businesses.
High among these is digitalisation, which has transformed operations across the globe and forced businesses to invest large sums of money to stay competitive. The growth of the digital sphere has brought with it a variety of new risks, which are now being tackled through an increasingly stringent regulatory environment.
In addition to these factors, businesses are also contending with mega-level challenges such as climate change and a global shift in customer expectations. While the spirit amongst global businesses has been impacted by these new challenges, Australian CEOs appear to be taking a more positive approach to this scenario.
The numbers in Big Four accounting and advisory firm KPMG’s new report appear to back up this assessment. There has been a dramatic decline in confidence amongst global CEOs since last year. Only 12% of executives across the globe are very confident about growth in the global economy this year, as opposed to 30% last year.
Australia’s trajectory has been in exact opposition of this. Where only 20% of Australian CEOs were confident about growth prospects in Australia last year, the number has escalated to 44% this year. Australian executives appear to have devised comprehensive strategies to drive this growth.
Among the approaches indicated by CEOs in Australia are demonstrating a propensity for disruption as a strategy for growth, alongside a focus on agility and flexibility within their operations. Mergers & acquisitions (M&A) are also a favourite avenue for future growth in the country.
Global M&A levels are currently on the rise, and activity in Australia has been similarly strong. A Deloitte report earlier this year revealed that just under half of all Australian CEOs expect substantial growth in M&A activity in the near future, primarily informed by their own business strategies.
Divestitures and deals are high among the list of priorities amongst Australian firms presently. The outlook when it comes to technology appears to be consistent with other assessments of the business environments so far. Businesses in Australia are aware of the potential that digitalisation holds, but are weary of the risks.
Most are underprepared when it comes to cybersecurity measures, although nearly 45% of the businesses are currently piloting automated technology, while nearly 50% are starting to implement automated applications. As a result, CEOs appear willing to navigate the challenging environment.
To enable this navigation, most agree that agility and flexibility is absolutely crucial. “In helping business become more agile, a framework of confidence in growth is a vital element,” says Gary Wingrove, CEO of KPMG Australia.
“Australian CEOs are defying the current economic outlook, and expressing confidence about local growth prospects between now and the end of 2022. They are more upbeat on company prospects than their overseas counterparts and most are planning investments in workforce digital skills and capital technology,” he added.
