Global CEO confidence returns to pre-pandemic levels

2nd September 2021

A KPMG poll of 1,325 business leaders in the world’s largest economies, has found increasing confidence in the global economy is set to spark an acquisition spree.

The survey saw 87% of respondents say they were looking to do deals to help boost and transform their businesses within the next three years, with mergers and acquisitions, joint ventures and strategic alliances identified as the main strategies for expansion and business transformation by 67% of those quizzed. Some 60% of business bosses are confident about the global economy’s growth prospects in the next three years, up from 42% in a poll taken during Q1.

The survey  found that eight out of ten global executives say they are ready to make an acquisition in the next three years and that just 21 percent of global CEOs – 14 percent in the UK – now say they are planning to downsize, or have already downsized, their organisation’s physical footprint

The KPMG 2021 CEO Outlook, which asked more than 1,300 global CEOs  – including 150 in the UK – about their strategies and outlook over a three-year horizon, finds that 60 percent of leaders (58 percent in the UK) are confident about the global economy’s growth prospects over the next three years (up from 42 percent in January/February’s global pulse survey).

The prospect of a stronger global economy is leading CEOs to invest in expansion and business transformation, with 69 percent of senior executives (67 percent in the UK) identifying inorganic methods (e.g. joint ventures, M&A and strategic alliances) as their organisation’s main strategy for growth. A majority (87 percent) of global and UK leaders stated that they are looking to make acquisitions in the next three years to help grow and transform their businesses.

The survey found that 30 percent (35 percent in the UK) of CEOs plan to invest more than 10 percent of their revenues toward sustainability measures and programs over the next three years.

Bill Thomas, Global Chairman & CEO, KPMG, said “Despite the continued uncertainty around the pandemic, CEOs are increasingly confident that the global economy is coming back strong. This confidence has put leadership in an aggressive growth stance. While inorganic growth strategies are a priority, CEOs are also looking to expand organically and continue to assess the future of work to ensure they can attract top talent.”

“If there is a positive to come out of the past 18 months, it is that CEOs 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. I’m 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.”

Jon Holt, Chief Executive of KPMG in the UK, said “After a difficult 18 months, it’s encouraging to see CEOs in the UK and globally thinking about growth and investment for the future with renewed confidence and optimism. CEOs have had to pivot their business strategies to face into many uncertainties brought by the pandemic, and now they are looking to move their plans from resilience to expansion as the economy bounces back.”

“ESG is also very much top of the agenda for CEOs, and they are right to build a sustainable recovery and make decisions that benefit wider society. Now is the time for a renewed push on setting out their businesses’ ESG credentials with COP26 just months away, and clients and investors laser-focused on working with businesses who have their own house in order.”