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CEOs in Australia appear relatively unphased by the economic uncertainty currently prevailing in the economy, as most appear to be optimistic about their near-term growth prospects. That’s according to Australian responses to KPMG’s global CEO survey.
The mood among Australian executives not only contrasts with the current economic scenario in Australia, but also contrasts with the relatively weak outlook among CEOs around the world. In recent years, a whole new set of challenges has hit global businesses.
High among them is digitization, which has transformed operations around the world and forced businesses to invest large sums of money to remain competitive. The growth of the digital realm has brought with it a host of new risks that are now being addressed through an increasingly stringent regulatory environment.
In addition to these factors, businesses also face enormous challenges such as climate change and a global shift in customer expectations. While the spirit among global businesses has been affected by these new challenges, Australian CEOs appear to be taking a more positive approach to this scenario.
Figures in the Big Four accounting and consulting company KPMGA new report appears to support that assessment. Since last year, there has been a dramatic decline in confidence among global CEOs. Only 12% of executives worldwide are very confident about global economic growth this year, up from 30% last year.
Australia’s trajectory has been exactly the opposite. While only 20% of Australian CEOs were confident about Australia’s growth prospects last year, this number has escalated to 44% this year. Australian managers appear to have devised comprehensive strategies to support this growth.
Among the approaches cited by CEOs in Australia is demonstrating a propensity for disruption as a growth strategy alongside a focus on agility and flexibility within their operations. Mergers and acquisitions (M&A) are also a popular avenue for future growth in the country.
Global M&A levels are currently on the rise and activity in Australia has been similarly strong. A Deloitte report from earlier this year revealed that just under half of all Australian CEOs expect significant growth in M&A activity in the near future, driven primarily by their own business strategy.
Divestments and trades are currently among the priorities of Australian firms. The outlook for technology appears to be in line with other assessments of the business environment to date. Businesses in Australia are aware of the potential that digitization holds, but are weary of the risks.
Most of them are underprepared when it comes to cyber security measuresalthough nearly 45% of businesses are currently piloting automated technology, while nearly 50% are beginning to implement automated applications. As a result, CEOs seem willing to navigate the challenging environment.
To enable this navigation, most agree that agility and flexibility are absolutely essential. “A growth confidence framework is a critical element in helping businesses become more agile,” says Gary Wingrove, CEO of KPMG Australia.
“Australian CEOs defy the current economic outlook and express confidence about local growth prospects between now and the end of 2022. They are more optimistic about the company’s prospects than their overseas counterparts, with most planning to invest in workforce digital skills and capital technology,” he added.
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