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In brief
In a global business landscape that is arguably more dynamic than ever, CEOs in Ireland demonstrate remarkable resilience and optimism. The findings of EY’s CEO Outlook survey highlight a forward-thinking mindset and a readiness to embrace the challenges and opportunities presented by technological advancements and global economic shifts.
Irish businesses have shown robust performance in recent years, navigating through uncertainties with strategic insight and innovation. As we look ahead, CEOs are ready to continue that success. The ability to adapt swiftly to changing market conditions, coupled with a deep understanding of global trends, positions Irish leaders to drive resilience and growth. By maintaining a culture of focus and agility to meet customer needs and encouraging continuous learning among their teams, CEOs will ensure their organisations remain competitive in the face of market challenges.
AI and emerging technologies are identified as top disruptors for the months ahead. We see companies in areas from media to regulation/compliance and in manufacturing using AI to redesign, simplify, and automate complex workflows for themselves and their customers. Success stories like these highlight how potential AI disruptions should be seen as opportunities for sustainable growth.
Transactions are increasingly serving as a key driver of growth for companies at earlier stages, enabling them to pursue strategic opportunities globally. This is crucial for companies emerging from a small island to build their brand. This ambition resonates with Enterprise Ireland's vision for indigenous firms to expand significantly, potentially reaching tens of thousands of employees and providing a counterbalance to multinational corporations.
Looking ahead, the potential for Irish businesses is immense, and the insights from EY’s CEO Outlook survey reflects a bright future. I believe ambition has never been higher among our leaders to take risks and drive for truly global scale.
Chapter 1
Despite some challenges, Ireland's economic outlook is favourable, and with record-high employment, CEOs are optimistic about the future.
Ireland's economic outlook is largely favourable, as underscored by our Autumn Economic Eye report. It forecasts that the domestic economy will expand by 2.3% this year, with an acceleration to 3.2% next year. While a slight reduction in GDP is expected for 2024, due to multinational sector volatility, a rebound is in store for 2025. The labour market is also performing well; employment is at a record high and job creation is set to continue.
There are challenges, however, such as infrastructural bottlenecks and labour shortages in a number of areas. These domestic issues are compounded by global developments, including increasing trade protectionism, the ongoing war in Ukraine, and the escalating conflict in the Middle East.
Nonetheless, our CEO Outlook survey shows that 64% of CEOs are optimistic about the Irish economy's prospects over the next 12 months, while a slightly lesser share (50%) hold a positive view of the global economy during the same period. This sentiment reflects the resilience and adaptability of Irish businesses and their ambition to succeed.
The measured optimism among CEOs in Ireland is encouraging. There are global trade and other headwinds, but the health of the economy, easing inflation, and interest rate cuts by the main central banks are reasons for cheer and should lend support to investment over the coming years.
Dr. Loretta O’Sullivan
EY Ireland Chief Economist and Partner
Chapter 2
CEOs remain optimistic about growth and managing costs, with a strategic focus on innovation and talent development.
CEOs in Ireland display a notable degree of optimism regarding the future of their businesses, particularly in light of the significant cost increases experienced over recent years. A majority (60%) are either very or somewhat optimistic about managing input costs and the overall cost of doing business in the upcoming year.
When it comes to business growth prospects, the outlook is even more encouraging. Revenue growth and profitability are areas where optimism prevails, with 60% and 67% of CEOs, respectively, expressing positive expectations.
The sentiment around investment capital and free cash flow is also upbeat, with 63% of CEOs optimistic. However, confidence dips slightly to 57% when considering their business’s competitive position over the next 12 months.
CEO optimism in Ireland, while substantial, does not quite match the intensity of their global counterparts, where around 70% express optimism across various business dimensions. This discrepancy may stem from the high levels of global economic uncertainty and increasing geopolitical tensions, which particularly affect Ireland as an open, export-orientated economy.
Attracting and retaining talent is an area of less confidence among CEOs surveyed, with just over half (53%) feeling optimistic, compared to 70% of global CEOs. This reflects the tight labour market and skill shortages in key sectors.
Despite the recruitment concerns, a strong 63% of CEOs are confident in their capacity to offer competitive salaries, suggesting a proactive stance in the battle for top talent.
Despite the overall optimism, a notable portion of CEOs express concerns, with 23% pessimistic about costs and 27% about profitability prospects. Nonetheless, the prevailing optimism is significant against a changing backdrop. CEOs are advised to keep a close eye on their cost base to achieve business growth and profit goals.
The talent shortage is a pressing issue, necessitating concerted efforts from the Government and other stakeholders to cultivate local talent and make Ireland an even more appealing destination for international professionals. To overcome these hurdles, CEOs must convert their positive outlook into tangible strategies that promote continuous learning and innovation.
Investing in employee development is key to attracting and retaining top talent, fostering loyalty, and boosting performance. By strategically enhancing their workforce, businesses can secure a competitive edge, ensuring not just survival but prosperity in the current environment.
Despite some concerns over costs and margins, CEOs are largely optimistic. They know that staying vigilant on costs is key to success. The talent gap is real, but it's an opportunity to continue to innovate and invest in our people, making Ireland a magnet for global talent. By focusing on continuous learning and employee development, we can turn challenges into a competitive edge.
Helena O’Dwyer
EY Ireland Partner; Head of Strategy EY-Parthenon
Chapter 3
CEOs tackle disruption, looking to AI and climate action, while adapting to supply chain challenges and technological shifts.
Geopolitical disruption is seen as a top three disruptive force globally for the coming year. However, among CEOs in Ireland, it ranks fourth, with AI and emerging technologies (44%), supply chain pressures (43%), and climate change and environmental issues (40%) taking precedence. Disruption differences can be linked to Ireland's unique economic dependencies, geographical position, and government policies. As an export-oriented island nation, Ireland is particularly vulnerable to supply chain disruptions, and the government's proactive stance on climate change has heightened the focus on environmental issues.
The upcoming Irish elections at the end of the month are expected to bring policy changes that could significantly impact Irish CEOs, influencing their strategic decisions and business operations. Despite the research being conducted before the recent US elections, it underscores the resilience and optimism of CEOs who have managed a decade of disruption and remain hopeful for the future.
It should come as no surprise that when asked to name the top three disruptive forces poised to drive significant change in their industry and key markets over the next 12 months, CEOs identified emerging technologies and AI at the forefront. This reflects a growing recognition that AI is not merely a tool for productivity improvement, but a strategic lever that can fundamentally reshape business models and customer engagement and ultimately drive competitive advantage.
The increasing acknowledgment of AI’s disruptive capabilities among CEOs in Ireland is a promising indicator that the nation is committed to staying ahead in this critical investment area. Interestingly, sentiment regarding AI and emerging technologies is even more robust among CEOs in Ireland compared to global respondents, suggesting a proactive approach to integration and innovation.
This heightened awareness underscores not only the advanced state of Irish industries but also the readiness of leadership to embark on a journey of transformation that elevates ideas to new heights. However, this momentum must evolve into actionable strategies that address the complexities of a rapidly changing marketplace.
Understanding how to effectively utilise AI goes beyond surface-level implementation; it requires recognising the integral role of trust and the need to focus on commercial value. This trust spans all levels of AI integration—not only in compliance and regulatory frameworks, such as the AI Act, but also in changing work practices and decision-making processes. Involving your people in the AI conversation fosters a culture of inclusivity and builds confidence in the technology’s application.
Eoin O'Reilly
EY Ireland Partner, Head of AI & Data
Having trusted advisors and partners throughout the AI journey is essential. These entities can provide critical insights, helping organisations identify where AI can create the most value and ensuring that the implementation aligns with ethical considerations and commercial outcomes. Understanding AI's genuine impact beyond the hype is vital for strategic implementation that drives transformative business results. For CEOs, the strategic integration of these innovations is not a choice but a necessity for sustainable growth.
Over the past year, our clients have witnessed remarkable outcomes from AI applications in driving sales performance, enhancing patient care and boosting employee productivity. The underlying success factors have been trust, clear outcome orientation, and curating the right data.
Eoin O'Reilly
EY Ireland Partner, Head of AI & Data
There is a marked difference between CEOs in Ireland and their global counterparts in relation to the next highest ranked disruptive forces. For CEOs operating in Ireland, the second most disruptive force are supply chain pressures – cited by 43%.
The high ranking given to supply chain pressures by CEOs likely reflects the vulnerability of the Irish industry in relation to global disruptions. Supply chains are complex and subject to price volatility and supply interruptions as a result of geo-political events such as wars in the Middle East and Eastern Europe along with macro supply chain disruptions such as the ‘Ever Given’ grounding in the Suez Canal.
Whilst we are seeing evidence that Irish supply chains are developing mechanisms to cater for disruptions, there is still more to be done as it is very clear that geo-political macro disruptions have become the new norm for the supply chain. Hence this is reflected in our CEOs’ responses. Embedding resiliency and flexibility into an organisation’s supply chain takes time and is multifaceted including the likes of alternate capacity strategies, alternate inventory strategies or integration of new information technologies such as AI. CEOs are clearly recognising the imperative need for their organisations to progress and establish such sustainable supply chain solutions.
The strong focus on climate change and environmental concerns is a positive development, especially in light of the resistance to the ESG (Environmental, Social, and Governance) agenda from certain political factions and segments within the business and investment spheres globally. Notably, 40% of CEOs in Ireland acknowledge the significance of these issues as a catalyst for change. This contrasts with the global average of 29%, suggesting that Ireland is somewhat ahead of the curve. One explanation for Ireland's progressive stance is the effective communication by the Irish Government regarding the urgency of the climate crisis, coupled with efforts to foster a collective agreement on the necessity for action. Additionally, the introduction of new regulations such as the Corporate Sustainability Reporting Directive (CSRD) is likely another contributing factor that is shaping this positive trend.
Once again, awareness must be translated into action. Surveys consistently show a high level of preparedness for compliance with new reporting regulations, but we need to see faster progress towards net zero right across the economy. While there is an understandable focus on cost control and the bottom line among many businesses in the wake of a period of high inflation, ESG factors will undoubtedly become a competitive differentiator in the not-too-distant future. It is therefore very heartening to see CEOs give such a high rating to this area.
Derarca Dennis
EY Ireland Assurance Partner and Sustainability Services Lead
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Read moreWhile 93% of CEOs in Ireland believe they're progressing yet still improving in response to market disruptions, only 7% feel they're ahead of the curve—modest compared to 38% of global CEOs. This cautious stance may reflect the resource capabilities influenced by Ireland's geographic and market scale.
When asked to name the three most important elements of their strategy for converting emerging technologies and technology disruption into opportunities for their business, CEOs gave the top ranking to consistently making bold, strategic investments in disruptive technology opportunities.
Second ranked was rapidly and systematically adopting disruptive technologies to create viable business models. Leveraging emerging technologies to build an innovation edge and drive new ways of working was in third place.
This suggests a strongly positive and proactive approach to the conversion of disruptive technologies into business opportunities. Highly noteworthy is the finding that 100% of CEOs rated their organisations as either extremely, very or moderately proficient at consistently making bold, strategic investments in disruptive technology opportunities. The result was broadly similar for leveraging emerging technologies to build an innovation edge and drive new ways of working with high levels of proficiency reported.
CEOs mandate is to navigate the complexities of technological change with foresight and determination. The consensus among CEOs in Ireland, with their unwavering commitment to strategic investments in disruptive technologies, is both commendable and instructive. It's a balanced approach—investing with confidence, adopting new technologies with agility, and fostering innovation into the culture of the workforce. These findings reflect a shared proficiency and a thoughtful strategy for harnessing disruption as an enabler of business growth. It's a dynamic yet measured call to action that embodies the spirit of leadership in the digital age.
Carol Murphy
EY Ireland Partner, Head of Markets
Chapter 4
Irish M&A shows resilience, with startups and tech leading a bullish market for strategic growth amid economic challenges.
The Irish M&A sector has shown commendable resilience in the face of surging capital costs, high inflation, and the shadow of geopolitical tensions that have cast uncertainty over the transaction landscape. Despite these challenges, there is a sense of cautious optimism as signs of a rebound in M&A pursuits emerge.
According to recent EY Competitive Edge research, there have been 921 transactions in Ireland over the past 12 months, totalling $33.7 billion. These transactions are not just numbers; they represent a dynamic market with 29.9% coming from mergers and acquisitions, 14.9% from angel/seed funding, and 13.7% in incubator/accelerator initiatives.
Startups have been particularly active, accounting for 46.8% of the transactions, while private companies followed closely at 45.7%. The sectors at the forefront of this activity have been Technology, Media, and Telecommunications (TMT) at 30.9%, Advanced Manufacturing at 14%, and Health Sciences at 12.8%.
Therefore, it comes as no surprise that businesses are looking to capitalise on the momentum. Our CEO Outlook survey reflects this sentiment, revealing that 23% of respondents are poised to actively seek out M&A opportunities in the next 12 months. Additionally, a significant 50% are considering strategic options such as divestments, spin-offs, or initial public offerings (IPOs). This data paints a picture of an M&A environment that, despite navigating through a period of financial and geopolitical turbulence, remains steadfast in its focus on growth and strategic repositioning.
The M&A market in Ireland has shown resilience amidst economic headwinds, with a promising uptick in activity. CEOs should now focus on strategic agility, leveraging opportunities for growth through acquisitions, while also considering divestments or IPOs to optimise their portfolios in response to an evolving financing market.
Helena O’Dwyer
EY Ireland Partner; Head of Strategy EY-Parthenon
With indications pointing to a gradual but sustained fall in interest rates in the coming months, at least one of the constraints on dealmaking appears to be abating. Furthermore, a reduced cost of capital may assist in bridging valuation gaps that have previously hindered agreements.
However, with high transaction cancellation rates reported for the past year in larger-cap companies, CEOs must ensure best practices in M&A strategy involve rigorous due diligence, precise target identification, and meticulous post-merger integration planning. The predominant factor behind these halts was the prohibitive or excessively high cost of external financing (30%), inflated valuations (27%), the unpredictable influence of technology on future performance (20%), geopolitical risks (13%), and regulatory ambiguities (10%).
Companies should adopt a disciplined approach to transactions, ensuring alignment with their long-term strategic goals and readiness for the integration challenges that follow. This strategic rigor is essential for navigating the complexities of M&A and maximising the chances of transaction success.
Reflecting on the year since 2023, Ireland's M&A narrative has been one of distinct change and resilience. While global volume and value were back, Ireland’s activity was not at that same level of fall off. Ireland’s market demonstrated a remarkable steadiness, and now we're witnessing an upswing in activity following Q2 and Q3 of 2024. With cautious optimism in the air, a wealth of dry powder capital awaits deployment, and our own pipeline signals a rising tide of deal-making. This is buoyed by a macro environment of easing interest rates amidst prior high inflation. Today's C-suite is recalibrating risk appetites, increasingly favouring M&A that aligns with strategic acquisition criteria. Ireland stands ready to capitalise on these evolving opportunities.
Ronan Murray
EY Ireland Partner Corporate Finance - Strategy and Transactions
Overall, the Irish M&A environment is cautiously navigating through financial and geopolitical turbulence, with businesses balancing the pursuit of growth through acquisitions against the backdrop of a more challenging financing environment and uncertainties. Despite this, the activity over the past year, shows a market that is adapting and positioning for future growth despite the headwinds.
The top five capital investment destinations over the next 12 months, according to global CEOs are United States, United Kingdom, Canada, Mexico, and Germany. Amidst global uncertainties, these developed markets present stable investment opportunities with robust M&A activities, particularly in sectors like technology, life sciences, and high-end manufacturing.
For Irish businesses, the U.S. remains a key player, leading M&A deals in 2024, supported by investments in the semiconductor industry and sustainability initiatives. The UK's focus on tech and life sciences, coupled with efforts to improve relations with the EU, are positives. Proximity to the U.S. market enhances the appeal of Canada and Mexico for European and Asian investors, respectively. Despite recent challenges, Germany's strength in high-end manufacturing and EU-backed sustainable development projects positions it for a comeback as an investment destination.
CEOs should look beyond Ireland for investment opportunities. Exploring markets like the US, UK, Canada, Mexico, and Germany can help grow their businesses. Forming partnerships and joint ventures is key to entering these markets and can help reduce risks from global economic changes.
Helena O’Dwyer
EY Ireland Partner; Head of Strategy EY-Parthenon
Chapter 5
CEOs lead with agility and innovation, turning challenges into growth and setting a global standard in strategic leadership.
It's clear that CEOs in Ireland are setting a global example in strategic agility and forward-thinking leadership. In a changing world, they are showing not just resilience but a proactive approach to embracing the digital revolution. The impressive performance of Ireland's businesses in recent years is a testament to their ability to pivot and adapt, capitalising on technological breakthroughs and navigating geopolitical shifts with astute innovation and a keen eye on the international market.
CEOs are stepping up to the challenge, combining smart technology investments with a strong emphasis on their people. They are enhancing the resilience of their supply chains and ensuring that environmental and social responsibility is ingrained in their core values. It's about making strategic deals and collaborating with the right partners to keep Ireland's ecosystem thriving on the global stage.
Carol Murphy
EY Ireland Partner, Head of Markets
By swiftly transforming ideas into actionable strategies, Irish leaders can position their companies as centres of innovation and exemplars of entrepreneurial spirit. The path forward involves embracing strong growth and bold leadership, essential for carving out a prominent place in the world market.
