CEOs are feeling more optimistic about the immediate outlook and the initiatives they need to take today to generate capital to invest in future growth. However, in a market facing multiple challenges, they remain focused on short-term returns. At the same time, the CEOs surveyed indicated that their long-term goals of decarbonizing and creating new revenue streams could be achieved more quickly by working more effectively with institutional investors and governments.
< p>These are some of the findings of EC's latest quarterly survey, CEO Outlook Pulse, which captures the views of 1,200 executives and 300 institutional investors worldwide, highlighting the priorities of boards of directors in today's rapidly evolving global economic landscape.
60% of CEOs surveyed are more optimistic about their companies' revenue growth, and 65% about their business's profitability. Surveyed CEOs' views of their company's outlook and the broader business environment remain largely unchanged from the previous survey 12 months ago, with some signs of improvement.
Opinions of CEOs and investors differ on sustainable growth over the next 12 months
Responding to the expectations of wider society to accelerate the shift towards sustainable development is a priority for more than three in four CEOs worldwide (77%), while over half (54%) view sustainability issues as a top priority than 12 months ago. However, in a challenging economic environment, nearly one in four (23%) responded that sustainable development is not currently a priority, with 18% of respondents attributing this decision to economic conditions and a further 5% stating that they want to focus on other board priorities. At the same time, investor interest in environmental, social and governance (ESG) issues is waning, with more than a third of institutional investors (35%) stating that sustainable development is now a lower priority for their investment portfolios than 12 months ago.
Tech and AI top strategic priorities
Investing in technology, including artificial intelligence (AI) to boost growth and productivity, is a top priority for nearly half (47%) of CEOs over the next 12 months. Strengthening data management and cyber security (45%) and overall cost management in every aspect of their business (38%) also remain important strategic priorities for businesses.
CEOs more positive towards mergers and acquisitions
Compared to 2023's sluggish deal landscape, CEOs and institutional investors are positive about mergers and acquisitions (M&A). Today, more CEOs plan to pursue deal opportunities in the next 12 months, such as IPOs, divestitures or spin-offs (71%), joint ventures and strategic alliances with third parties (48%), or mergers and acquisitions (42%) , signaling a strong willingness to pursue deals.
The survey highlighted as the three most important strategic drivers for pursuing acquisitions, acquiring technology, new production capabilities or innovative startups (40%), increasing market share (33%) and access to new geographical areas (32%).
Commenting on the survey findings, Ronald Attard, Country Managing Partner of EY Cyprus, said: “The main trend emerging from the latest edition of EY's CEO Outlook Pulse survey is the need for CEOs to balance immediate financial pressures with longer term checks. The unfavorable economic environment forces CEOs to focus on managing business costs, while at the same time the rapid development of artificial intelligence combined with increasing cyber risks leads them to prioritize investments in emerging technologies. CEOs also view M&A primarily as a lever to address their short-term priorities rather than long-term growth. However, as a result of this focus on short-term economic returns, sustainable development appears to be slipping as a priority on the business agenda, which is disappointing to those who expect business to set the tone on this critical issue.”
< p>You can read the full survey at: ey.com/CEOOutlook
