Almost half of CEOs do not believe there will be a return to pre-COVID business operations until 2022 – while a quarter do not ever see a ‘return to normal’ post-pandemic, a KPMG survey of 500 global CEOs shows.
A higher proportion of Australian respondents believed their business had changed forever than any other of the 11 countries surveyed.
The survey of CEOs with companies over US$500m turnover also finds that the easing of government restrictions would be a more important trigger to return to normal than a successful roll-out of the COVID vaccine. The two major concerns expressed by the leaders about the vaccine distribution were employees in different countries not having access to vaccines at the same time, and staff being put off being vaccinated by misinformation.
Yet despite the ‘delayed/if ever’ uncertainty about a return to normal, the CEOs are overwhelmingly confident about their company and country’s prospects over the next three years. Almost 80 percent are expecting growth of between 2.5-10 percent but fewer than half were optimistic about the prospects for the global economy in that timescale.
Return to Normal/Vaccinations
COVID Business Impacts
Diversity & Inclusion
Dr Brendan Rynne, Chief Economist, KPMG Australia, said: “Many CEOs now doubt if there can be a return to normal, as we previously understood it. A smooth and uniform vaccine roll-out across most countries is clearly key to many multinationals. The risk is that nationalism or other geopolitical issues could prevent that.”
“KPMG Australia’s own scenario analysis shows there could be a 2.8 percent boost to world GDP if a successful vaccine roll-out happens, and a 1.2 percent drop if it does not. Failure to deliver a comprehensive and timely vaccine program to low- and lower-middle-income countries – which would prevent all countries being able to fully open their borders to international travellers before 2022 – would be a significant blow to the world economy.”
“Our survey shows many companies are clearly looking to governments to give them the go-ahead to resume normal business operations but easing of restrictions will largely depend on the vaccine roll-out. There is also a question of whether going ‘back to normal’ would be a good thing anyway, or whether we should use this once-in-a-lifetime situation to permanently lock in changes.”
Dr Rynne said it was encouraging to see that digital transformation has accelerated and technology spend will keep rising. KPMG analysis has shown that wage growth is closely connected to capital spend and increased productivity and this will be crucial looking ahead.
Gary Wingrove, CEO of KPMG Australia said: “ESG has been the big climber in priorities since the COVID era began. Much more focus on staff mental health and employee engagement will continue but business also now has a heightened ‘green recovery’ agenda. Business has been largely taking the lead on issues like decarbonisation, but they need clear government and regulatory guidance on the road to Net Zero. From our survey, it does seem as if the US re-entering the Paris Accord will give the climate agenda a big push.”
Mr Wingrove also said it was notable that almost 100 percent of CEOs surveyed said they felt a greater emotional connection to their company purpose since the COVID era began.
“The fact that 98 percent said purpose had helped them decide best how to meet stakeholder needs during the crisis is significant. It shows leaders are aware of the importance of the human element and the need to understand the impacts of disruptive change such as COVID on emotional wellbeing.”
The 2021 CEO Outlook Pulse Survey asks CEOs from the world’s most influential companies to provide their 3-year outlook on the economic and business landscape, as well as the ongoing COVID-19 pandemic. This Pulse Survey looks at how their views have evolved since July/August 2020.
Five hundred CEOs from 11 key markets (Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, the UK and the US) were surveyed from 29 January–4 March 2021. All respondents represent organisations that have annual revenues greater than US$500M and 35 percent of the companies surveyed have more than US$10B in annual revenue. NOTE: some figures may not add up to 100 percent due to rounding.
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