Middle East CEOs more upbeat than peers on 3-year growth outlook
Survey shows that CEOs are increasingly confident in global economic recovery a year after Covid pandemic struck.
The confidence level of Middle East CEOs in their organisation’s revenue growth over the next three years is higher than their peers elsewhere in the world albeit they are relatively less upbeat about the worldwide economic recovery, a new survey has revealed.
PwC’s survey shows that one year after Covid-19 was declared a pandemic, CEOs are increasingly confident in global economic recovery – 72 per cent of business leaders in the Middle East and 76 per cent globally believe that economic growth will improve in 2021.
CEOs in the region are also more optimistic about their organisation’s growth prospects as mass vaccination programmes offer an assured exit from the pandemic. Some 52 per cent of those polled said they are ‘very confident’ about revenue growth over the next 3three years, compared to 47 per cent globally.
The 24th CEO of 5,050 CEOs in 100 countries and territories conducted in January and February 2021 revealed that 76 per cent of the respondents from the Middle East are planning to seek operational efficiencies in the next 12 months in order to drive growth and 50 per cent believe that good health and well-being of the workforce should be a business priority.
Hani Ashkar, PwC Middle East senior partner, said companies have emerged more resilient and agile than ever before after one year of Covid. “Middle East CEOs are cautious but optimistic. It’s clear that in order to continue to thrive, companies will need to embed lessons learnt as a result of the pandemic to transform their operations, continue to drive investments and secure the wellbeing of their people.”
Ashkar said the survey findings reveal that organic growth is high on the agenda for many CEOs, with 35 per cent saying that they are planning to enter a new market in the next year, more than any other region surveyed. Others are looking at forming new strategic alliances or joint ventures in the next 12 months – 41 per cent are planning to do so compared to 36 per cent last year. M&A will also remain an important tool with 26 per cent indicating they plan to pursue it.
The survey findings reveal that Middle East CEOs are drawing on their experience of withstanding the dual shock of Covid-19 and the drop in oil prices to build smarter, more resilient organisations.
Two lessons, in particular, are highlighted in the results. First, the abrupt mass shift to remote working in 2020 amid worldwide economic upheaval has pushed employee welfare up corporate agendas, with 50 per cent respondents agreeing that improving the health and well-being of employees should be a business priority, up from 43 per cent in 2016.
Second, Covid-19’s social and economic impact has prompted 76 per cent of CEOs across the region, inline with their peers worldwide, to reassess and overhaul business and operating models, as well as corporate transformation programmes, that were conceived and developed before the pandemic in order to drive growth.
Some 59 per cent of those surveyed in the Middle East, compared with 49 per cent globally aim to increase their investments in digital transformation by 10 per cent or more over the next three years. In the aftermath of the global financial crisis, in 2010, only 11 per cent of Middle East CEOs planned to substantially increase their digital investments.
Stephen Anderson, Middle East strategy and markets leader, said CEOs realise that they need to transform their organisations and invest to emerge stronger from the pandemic. “Planned digital investments, however, will only realise their full potential if organisations ensure that employees are upskilled to utilise Artificial Intelligence (AI), robotics, machine learning and other new technologies. CEOs are already citing a lack of available skills as a key constraint and as a region we are going to have to be able to develop our own talent to compete.”
Some 70 per cent of Middle East CEOs, more than any other region, believe a skilled, educated and adaptable workforce is a top business priority.
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