Less than half of UK CEOs say they are confident in the growth prospects for the global economy
Confidence in the global economy has fallen sharply among the leaders of Britain’s biggest businesses, according to a new survey from KPMG.
The 2019 KPMG CEO Outlook reveals that less than half of UK leaders are confident in the prospects for global economic growth over the next three years. This is a significant fall of 34 percentage points year on year and reflects deep-rooted concerns over geopolitical stability, trade wars and the persistent rise of economic nationalism.
Yet, despite uncertainty around Brexit, KPMG’s survey shows that a significant proportion of CEOs from some of the world’s largest economies still view the UK as an attractive investment destination.
Chief executives from the US, China and Japan – the UK’s top investor and the world’s second and third biggest economies – say they are on average now more likely to invest in the UK post-Brexit.
Closer to home, the uncertainty has taken its toll on investor sentiment in Europe. CEOs based in France, Germany, Italy, Spain and the Netherlands say they are on average now less likely to invest in the United Kingdom after the country leaves the EU.
Bill Michael, Chairman and Senior Partner at KPMG in the UK, said: “These are testing times for chief executives in the UK. The continued uncertainty over Brexit has made it harder for leaders to make big calls on investment. At the same time, disruption from emerging technology, climate change and fragile geopolitical and trade conditions have created one of the most complex backdrops to operate against in recent times.
“Yet CEOs are resilient - there is life after Brexit. They are optimistic about their own organisation’s prospects, the prospects for future economic growth in this country and the contribution they can make. These results demonstrate we must have faith in business and a market-based economy as the best way to deal with the economic and social challenges of today.”
In this year's survey, CEOs zeroed-in on three big risks to growth. Emerging technology rose up the risk agenda to number one, slightly ahead of climate change and economic nationalism.
However, despite technology dominating UK CEOs’ risk agenda, only one in two leaders believe they need to improve the way they innovate. This was the lowest rate seen across the 11 countries surveyed. By contrast, 80 percent of Dutch CEOs say they see a need to improve their innovation processes and execution.
Bill Michael said: “A sustainable business must, ultimately, have a backbone of creativity and innovation. Getting this right is critical, or companies will struggle to react to rapid changes in the market and the threat of new digital entrants. For many, it’s transform or die.”
The survey data published in the 2019 KPMG CEO Outlook is based on a survey of 1,300 CEOs in 11 of the world’s largest economies: Australia, China, France, Germany, India, Italy, Japan, the Netherlands, Spain, the UK and the US. One hundred and fifty of them were CEOs running companies in the UK.
The survey was conducted between 8 January and 20 February 2019. The CEOs operate in 11 key industries: asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology, and telecommunications.
Of the 1,300 CEOs, 310 came from companies with revenues between US$500 million and US$999 million; 543 from companies with revenues between US$1 billion and US$9.9 billion; and 447 from companies with revenues of US$10 billion or more.
For media enquiries, please contact:
Zoe Sheppard, KPMG in the UK
T: +44 (0)777 073 7994
KPMG Press Office: T: +44 (0) 207 694 8773
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 16,300 partners and staff. The UK firm recorded a revenue of £2.338 billion in the year ended 30 September 2018. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and has 200,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.