CEOs expect to grow back better. It’s time to be bold.
Optimism is on the rise. PwC’s 24th CEO Survey revealed that 70% of Australia’s CEOs anticipate an improvement in global economic growth this year, a record increase from 11%. Eighty-eight per cent also expect an increase in revenue growth over the next 12 months.
Looking longer term, 92% of local CEOs express confidence in revenue growth for the next three-year period and 88% of global CEOs agree. This rebound is unsurprising considering the international recognition Australia has received for its handling of COVID-19 and an underlying sentiment that the economic impact will unlikely worsen.
There has been a surge in Australia’s CEOs looking to mergers and acquisitions (M&A) as a path to business growth (63% in 2021, up from 34% last year). The drivers for this are many and varied. As government support ends for many distressed companies, corporate leaders will be eyeing potential acquisitions. Others may seek to pivot the nature of their businesses, buy in related markets, or purchase complementary businesses that add to their technology or logistics capability.
The majority of Australia’s CEOs (84%) also point to organic growth as a driver of organisational progress in 2021. Given the prevailing economic climate, this may involve business process innovation rather than radical technology innovation.
It’s clear that now is the time for CEOs to seize the initiative and prepare the ground for economic growth. It’s encouraging that many have signalled their intent to pursue M&A but business leaders must be bold in other ways too. With low interest rates and government incentives on the table, business leaders must back up their confidence with investment to cultivate growth.
Together, let’s take these steps towards positive change:
- Invest in capital and innovation to ride the post-pandemic growth wave
- Take advantage of historically low interest rates and a relatively high Australian dollar to consider offshore investments in supply chains
- Use the challenge of trade tensions to explore new markets with partners and consumers
- Work with governments to assist in shaping their post-pandemic growth agenda
To read more about this topic and the CEO Survey findings visit here.
Building resilience: from reactive to proactive explores the actions business leaders should take in 2021 to explore what can be done differently to protect organisations against ongoing disruptions.
The five themes we’re exploring include:
- Growth - To achieve sustainable growth, Australia’s CEOs must carefully cultivate their businesses
- Workforce - Australia’s CEOs expect growth but need clear workforce strategies to achieve it
- Technology and Cyber - Australia’s ECOs concerned over cyber threats and changing consumer behaviour
- Climate Change - Australia’s CEOs set to take more action on climate and ESG - but there’s no room for complacency
- Risk and COVID-19 - Risk management lessons from COVID-19 can steer Australia towards prosperity