It seems like COVID-19 has affected everything and everyone, but its effect varies dramatically from person to person, country to country. Countries have employed drastically different methods to fight back infection curves. Local municipalities have tailored protective measures to suit on-the-ground realities and public perception. And now, with diverse new variants popping up in different geographies, we face an uneven global vaccine roll-out.
More than a year into this pandemic, we’re all on different timelines and trajectories, even though we face a similar foe. And from a global perspective, it’s a difficult proposition—which may, in part, help to explain why global leaders interviewed in the 2021 KPMG CEO Outlook Pulse Survey are confident in the prospects of their own business and country’s economy, but their outlook on the global economy is at the lowest since 2017.
Supply chain risk less of a threat? That’s good news for the recovery.
There’s more to it though. Large markets across the world will likely be at many different stages of the pandemic for months to come. This has important implications for global supply chains, which has captured numerous headlines over the past year, from availability of PPE to shortages in semiconductors. There has never been a disruption to supply chains like COVID-19, simply because we haven’t had to shut things down like we’ve had to over the past year.
But curiously, supply chain risk dropped a few places down the list of concerns for CEOs in our Pulse Survey. It was surpassed by cyber security, regulatory issues and tax burdens—all things focused on forward momentum. Companies all leaned on technology in the crisis, now they need to protect those gains. As governments put forth stimulus money and recovery funds, which at some point need to be repaid, may see corporates having to pay a greater share and facing more regulatory scrutiny.
These are all difficult challenges, but they were listed by business leaders because their eyes are now starting to drift beyond the horizon, just after the health crisis. Supply chain risk ranked fourth, which means there are still issues, but with it dropping down the list, I think businesses leaders are becoming more comfortable with where things are headed.
Optimism is growing
People, not just leaders, are starting to see a viable path forward to the new reality, now that we have not just one, but multiple vaccines approved for use. And because of it, leaders can start to plan for a post-pandemic future, even if the timing may still be a little hazy.
According to our survey last year, Chief Executives were going to shrink their physical footprints drastically. This year? Only 16 percent of CEOs said they would be downsizing compared to 69 percent in August. Additionally, only 21 percent are looking to hire talent to work predominantly remotely, down from 73 percent last year. It’s a remarkable reversal as business leaders, and their people by extension, want to start seeing each other again. It’s going to happen when it’s safe, but it’s going to happen.
That is an incredibly optimistic stance and one I am excited to see. By planning for that future today, they are going to be in a strong position to capture the energy and dynamism of a pent-up market. In KPMG’s recent Global Economic Outlook, economist in the US and UK are projecting their GDP will grow 5 percent in 2021 and the Eurozone GDP by 4.2 percent—two forecasts that may end up being on the conservative side.
I am sure there will be more twists and turns before we emerge from the pandemic, but things are trending in the right direction. Optimism feeds on itself, and I for one am eager to finally start meeting people again in-person, shaking their hands and catching-up over a meal I didn’t cook myself.
We may need to wait a few more months to do it, but we’re so close to finally entering the new reality.