A majority of CEOs (86 per cent of the total respondents) globally anticipate a recession to hit over the next year. However, most of them (58 per cent) expect it to be “mild and short”, according to the KPMG 2022 CEO Outlook. It added that a strong majority of senior executives believe that a recession will disrupt anticipated growth.
The KPMG 2022 CEO Outlook asked 1,325 CEOs between July 12 and August 24 this year at the world’s largest businesses about their strategies and outlook. The survey said that 14 per cent of senior executives identify a recession among the most-pressing concerns today — up slightly from early 2022 (9 per cent), while pandemic fatigue tops the list (15 per cent).
“Over the next year, more than 8 out of 10 (86 per cent) global CEOs anticipate a recession to hit, with 71 per cent predicting it will impact company earnings by up to 10 per cent. A strong majority of senior executives believe that a recession will disrupt anticipated growth (73 per cent). However, three-quarters (76 per cent) have already taken precautionary steps ahead of a looming recession,” the KPMG 2022 CEO Outlook said.
It added that despite those concerns, senior executives (73 per cent) also feel markedly more confident about the resilience of the economy over the next six months than they did in February (60 per cent), when KPMG surveyed 500 CEOs for its CEO Outlook Pulse survey. Further, 71 per cent of leaders are confident about the global economy’s growth prospects over the next three years (up from 60 per cent in early 2022) and nearly 9 in 10 (85 per cent) are confident about their organisation’s growth over the next three years.
With continued economic turmoil, there are signs that the Great Resignation could be cooling down, with 39 per cent of CEOs having already implemented a hiring freeze, and 46 per cent considering downsizing their workforce over the next six months. However, the three-year view is more optimistic with only nine per cent expecting a further reduced headcount.
“Cybersecurity has dropped from the top 5 risks to growth over the past year, with only 6 per cent of CEOs naming it as their top risk (17 per cent in February 2022). However, the cyber environment is evolving with 77 per cent saying their organization views information security as a strategic function and as a potential source of competitive advantage. Geopolitical uncertainty is also raising concerns of corporate cyber attacks, according to 7 of 10 CEOs (73 per cent),” the Outlook report said.
It also said global CEOs recognise the importance of ESG initiatives to their businesses, especially when it comes to improving financial performance and driving growth. In fact, 69 per cent of senior executives noted greater demand from stakeholders for increased reporting and transparency on ESG — 58 per cent in 2021.
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