Welcome to our sixth annual KPMG CEO Outlook
We are pleased to share with you the output of KPMG’s 2021 CEO survey. This survey provides a unique insight into how leaders' priorities and their business strategies have shifted over the last 12 months and how they vary across Northern Ireland, the Republic of Ireland and internationally.
Today the confidence levels of CEOs in Northern Ireland about the outlook for their companies and the domestic economy are almost back at pre-pandemic levels. While the vast majority are confident they will succeed, they are cautious about the level of growth achievable. They are therefore projecting moderate levels of growth in their 3-year strategies. These growth strategies are underpinned by a strong appetite for M&A and other inorganic growth levers but are equally tempered by an acute awareness of operational risks including supply chain resilience, cyber security and digital disruption.
The survey highlights how the pandemic has reshaped the workplace for the foreseeable future and while CEOs now recognise the need to provide employees with more flexibility and trust, it has also reaffirmed the vital role of the office at the heart of their businesses culture.
Among the many socio-economic and environmental challenges faced by CEOs over the last year, the survey highlights that stakeholders are focusing more than ever on ensuring companies are accountable for their role in tackling climate change by cutting carbon emissions and leaving a positive impact on society. The importance of the forthcoming COP26 summit in Glasgow and the need for significant Government intervention to help deliver climate solutions is reinforced by the sentiment highlighted in our report.
As we begin to emerge from a post-crisis world, I know we have learned many lessons over the last year and a half that will endure to make a positive and lasting contribution to our society and our economy. Like many of those surveyed, I am optimistic about the future as I believe that the changes made as a result of the crisis will make businesses more competitive and resilient. I would like to thank the CEOs involved for taking the time to participate in our survey.
A Northern Ireland Perspective
Tapping into the mood of Northern Ireland’s business leaders is always a worthwhile exercise. They have their finger on the pulse of their companies, of the sectors they work in and can give an accurate picture of the economic landscape. That’s particularly so this year - after 18 unparalleled months of unilateral upheaval which businesses of all sizes, all sectors and in all jurisdictions have experienced, the findings of the latest KPMG CEO Outlook are fascinating and, in many respects, comforting.
With optimism only slightly below pre-COVID levels, they have bounced back from a year ago when the COVID-19 pandemic and subsequent lockdown had left many chastened and fearful of the future for their business.
That is something which chimes with CBI members in Northern Ireland, many of whom are reporting that pent-up demand is coming through, order books are full, global supply chains are improving and there is a lot more positivity on the horizon. Encouragingly, the CEO Outlook report also paints a picture of an optimistic outlook, with Northern Ireland’s leaders in particular cautiously confident about the success of their own businesses in the months ahead.
Again, our members would concur, but there are undoubtedly challenges in the current environment which need to be overcome around the flow of trade after Brexit and as the pandemic loosens its grip on the world’s economy. We are hopeful they will be ironed out in the near future and that international shipping and supply pressures will ease as new fleets are commissioned.
Unsurprisingly, the climate agenda remains front and centre of CEOs’ minds. It’s interesting to note in the CEO Outlook report businesses, having made huge strides in addressing sustainability and climate change over the last couple of years, are turning to Government for leadership and to turbocharge their goals to reach net zero. Undoubtedly, a multi-faceted approach will be needed if the gains made in this area are to stick and be built upon in the coming years.
The future of work is also a hot topic amongst CBI members, many of whom, like those surveyed in this report, still hold value in their office space as a place to build culture and collaborate.
What is perhaps surprising in the report is how leaders’ view of the office has swung so far in the last 12 months. Last year nearly three quarters of respondents in Northern Ireland were planning to downsize office space. That has fallen to just 16 percent this year, showing a marked reversal in mood. All in all, the KPMG CEO Outlook report tells the tale of optimistic leaders in Northern Ireland, successfully managing to chart a path through one of the most difficult periods of change and transformation in a lifetime. Such tenacity, drive and innovation sets Northern Ireland up well for a bright future.
CBI Northern Ireland Director
The KPMG 2021 CEO Outlook offers a unique lens on the ongoing implications of the COVID-19 pandemic and the prospects for economic recovery both in Northern Ireland, The Republic of Ireland and around the globe and draws on perspectives for the future of over 1,300 CEOs at home and abroad.
The Road to Renewal
Confidence in the global and local economies returning to pre-pandemic levels
- The NI economy - 72 percent of NI CEOs surveyed are optimistic about local growth prospects – up from 44 percent in 2020
- Global outlook - 60 percent global of CEOs are confident about global growth over the next three years — up from 32 percent in 2020. 64 percent of NI CEOs are confident in global outlook – up from 28 percent in 2020
- Risk concerns - For NI CEOs the top three risks are: Cyber security, operational concerns and disruptive technology
Work & Digital Agility
The pandemic reshapes work, but the office remains central
- The office centre stage – Only 16 percent of NI CEOs plan to downsize their office space due to the pandemic – down significantly from 72 percent in 2020
- Flexible working – 44 percent of NI CEOs said that most employees in their organisation will be working remotely at least 2 or more days a week
- Digital Partnerships – 52 percent of NI CEOs also say that new partnerships will be key in maintaining the pace of digital transformation
Purpose and Priorities
ESG reporting moves centre stage
- The ESG agenda - 72 percent of NI CEOs report demand from stakeholders for increased reporting on ESG matters compared with 58 percent of counterparts worldwide
- The climate imperative - 76 percent of NI business leaders are focused on locking in their sustainability and climate change gains made during the pandemic
- Focus on COP26 - 84 percent of NI CEOs say that this autumn's COP26 climate summit in Glasgow will be pivotal in injecting urgency to the climate change agenda