UK CEO Oultook 2018: Realistic growth - KPMG United Kingdom
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Realistic growth

The future is what it is. The only question is: Are you strong enough and resilient enough and quick enough to be able to react to it?

Saker Nusseibeh
Hermes Investment Management

Optimism tempered by pragmatism

Despite current uncertainties, CEOs remain generally optimistic about growth at the macro level.

With a number of major economies moving into a period of synchronised growth, 67% of global CEOs say they are either confident or very confident about the global economy. An even higher proportion (78%) express confidence about the growth prospects for their own industries – a rise of nine percentage points on 2017.

At the national level the picture becomes more mixed. Although 74% express confidence in their domestic markets, we’ve seen a dip in a number of major economies including the UK, Germany, Spain and Italy. The vast majority of UK CEOs (77%) are confident about the global picture. But fewer (65%) are optimistic about domestic growth over the next three years.

Confidence in three year growth prospects


Confident in global economy


Confident in industry


Confident in country



Source: 2018 Global CEO Outlook, KPMG International

Global CEOs’ confidence in their own country’s three year growth prospects, 2018 and 2017 (by country)

Source: 2018 Global CEO Outlook, KPMG International



A healthy dose of pragmatism

Cautious revenue growth forecasts

At the revenue level, CEOs express a much more cautious outlook on top line growth over the coming three years.

That may reflect their concerns about the impact of significant external factors including a return to territorialism, which they cite as the biggest risk to growth. The difficulty of reaping good returns from new digital business models could be another factor.

Overall 55% of global CEOs expect modest growth of less than 2%. The confidence of UK business leaders has been declining steadily since 2016 and they remain cautious, with 61% predicting growth of less than 2%.

We don’t expect a major improvement in confidence until uncertainty dissipates further. UK CEOs’ expectations of slightly lower revenue growth … could continue given expectations for weaker economic growth.

Yael Selfin
Chief Economist
KPMG in the UK

We invest in growth businesses and younger business… Once they have reached a certain scale, we bring them in-house and try and merge the two cultures together and keep the best of both worlds.

Stephen Glancey

Realistic growth strategies for uncertain times

Less than three in 10 CEOs see organic growth - whether through R&D, product innovation or recruitment – as the strategy for growth over the next three years.

So how are CEOs planning to boost the top line?

Seventy two percent say they are focused on strategic alliances with third parties, M&A, joint ventures and outsourcing to drive expansion. That’s a particular focus for UK CEOs with 70% saying partnerships are the only way to achieve the agility they need and 61% planning to collaborate with innovative start-ups.

The most important strategies to drive growth over the next three years

Source: 2018 Global CEO Outlook, KPMG International



CEOs’ hiring plans reflect their pragmatism over future growth. Only 37% of global CEOs expect to expand their workforces by more than 6% in the next three years – a 10-point fall since last year.

They are also relatively cautious about hiring new skills before they have hit growth targets. By contrast, UK CEOs appear to be more proactive in hiring new skills with an eye on the future. Sixty one percent said they were recruiting irrespective of growth targets compared to 48% of their global peers.

Large organisations are seeking to partner with start-ups to help drive disruption. They do that because through these partnerships they get agility, flexibility, and above all optionality. It ensures they don’t bet the house on one particular technology – many would rather be fast followers than pioneers.

Sanjay Thakkar
Head of Deal Advisory
KPMG in the UK