Although the economic environment remains fragile, with expected continuing uncertainty, KPMG’s 2016 Global CEO Outlook charts strong optimism among CEOs for their companies’ near-term growth.
There are signs that the European economies are picking up slightly, but the economic environment remains fragile. At first blush the findings of KPMG’s 2016 Global CEO Outlook survey may come as a surprise.
This extensive survey of global CEOs in major companies around the world found that they are optimistic in their outlook for the next 3 years for the global economy, their national economies and their companies.
This confidence is a testimony to CEOs’ resilience as leaders, and not blind optimism or unrealistic projections. “CEOs have to look ahead with confidence, see the future and the growth of their companies,” says Dr. Ventzislav Kartchev, Chief Economist, KPMG in Germany.
While confidence is high, CEOs think that the levels of growth will be tempered. The biggest group, 48 percent, expect to grow annual revenues by between 2 percent and 5 percent over the next 3 years. That is an overall growth roughly in line with global GDP growth.
This optimism is somewhat more subdued in the short-term. The balance between CEOs' confidence and realism is further confirmed by the importance they attach to the global economy, naming global economic factors as having the biggest impact (16 percent) on the growth of their companies over the next 3 years. Some industries are expecting significant growth. Digitization, driven by the Internet of Things and the Industrial Internet, will accelerate growth in the medium to long term.
It bodes well for the future that CEOs today are not waiting out tough times. Mark A. Goodburn, Global Head of Advisory, KPMG International, says, “Whether the tide rises or falls with the economy, CEOs understand very well that they are at the helm and ultimately they can determine their company’s outcome.”