- Almost two-thirds of CEOs globally anticipate a rise in their revenues and profits, despite the challenging global economic environment
- 58% accelerating their business transformation plans, with significant bounceback in M&A anticipated in 2024
- 41% of Global CEOs say that adopting AI technologies to drive efficiencies and improve business performance will be a priority for the year
- Election super-cycle front of mind for CEOs, as over half of the global population heads for the polls
Dublin, 5 February 2024: CEOs around the globe are optimistic about their ability to drive revenue growth and profitability in 2024 despite global economic challenges, according to the latest EY CEO Outlook Pulse survey.
The EY quarterly survey of 1,200 global CEOs on their prospects, challenges and opportunities, shows they are bullish on business performance for 2024 with a significant majority of expecting an increase in revenue growth (64%) and profitability (63%).
Furthermore, 41% of Global CEOs, say they will be prioritising widespread adoption of AI technologies to drive efficiencies and improve business performance, while three in four (76%) agree the technology will have little impact on revenue growth at this time, viewing it as a strategic necessity rather than an immediate driver of revenues.
The optimism for success comes despite acknowledgement of a continued challenging macroeconomic environment with three-quarters (76%) of CEOs surveyed expecting the global economy to continue to endure low or no growth and over half (57%) forecasting an increase in the cost of business.
Graham Reid, Head of Tax & Law and Clients & Markets at EY Ireland, says:
“Even though CEOs are expecting slower growth in the global economy, this hasn’t dampened their confidence. Mirroring trends that we are seeing here in Ireland CEOs globally are seeking opportunities to drive efficiencies, transform their business for growth and to harness the potential of Artificial Intelligence. While Ireland’s economy has not been immune to global macroeconomic trends over recent years, businesses here – whether indigenous or multinational – have handled this uncertain trading environment remarkably well and are now looking ahead with increasing confidence to the future.
Lift-off for deals market in 2024
CEOs are anticipating a deals market bounce-back with eight in 10 (79%) respondents predicting an uptick in mergers and acquisitions (M&A) megadeals above US$10bn. Thirty-six percent of respondents are also actively pursuing M&A transactions over the next 12 months and a further 29% are seeking divestments. The US maintained its position as the most attractive target region in terms of M&A activity followed by Japan, the United Kingdom, China and India. Manufacturing was identified as the top sector for M&A deals closely followed by ‘banking and capital markets’, ‘insurance’, ‘consumer products’ and ‘mobility’ rounding up the top five.
This quarter, the survey also captured the perspectives of 300 private equity (PE) leaders across more than 20 countries, regarding their investment and portfolio management outlook. Mirroring CEO sentiment, the majority of surveyed PE leaders (71%) also predict an uptick in megadeals. Seventy percent of surveyed PE leaders predict an increase in corporate divestment or carve out activity in 2024, signifying a more buoyant deals market than seen in the previous year.
Graham Reid says, “Many CEOs globally are revisiting their business transformation plans, scanning for smart investments and laying the groundwork for potential alliances as the M&A market now begins to show signs of recovery.”
Transformation plans speed up, with a focus on efficiencies
Underpinning the rise in CEO confidence is a rush toward strategic transformation, 58% of CEOs surveyed are accelerating their business transformation agendas – a significant leap, almost tripling from 21% in July 2023. In stark contrast, only 5% now report having no transformation plans, a fall from 37% in July 2023. Nevertheless, despite the bullish sentiment, CEOs are demonstrating pragmatism in their approach to business transformation. Primary focus areas include efficiency enhancements and cost management strategies.
Graham Reid says, “If 2023 was the year of transition as organisations grappled with a series of crises, 2024 is shaping up to be the year of action. With an acceptance that the costs of doing business are unlikely to fall to pre-pandemic levels, we’re seeing a shift in how CEOs approach business transformation, balancing optimism with pragmatism and focusing on efficiency and cost management.”
Geopolitical risks take centre stage in bumper year for elections
With over half of the world’s population going to the voting booth over the next 12 months, CEOs are acutely aware of geopolitical risks and the potential business impact. Over three-quarters of those surveyed (78%) are worried about the potential rise of populist movements to increase geopolitical uncertainty and create business challenges. Seventy-six percent of respondents were also concerned about the political misuse of AI in major 2024 elections.
While many CEOs feel confident about their organisation’s ability to integrate geopolitical turbulence into their decision-making, nearly half (48%) of respondents believe there is room for improvement in their defined and active processes for managing geopolitical risks. In fact, 98% of CEOs and PE leaders surveyed are having to make alterations to their investment plans including exiting certain businesses (32% of CEO respondents and 38% of PE respondents) or delaying a planned investment (42% of CEO respondents and 32% of PE respondents).
Graham Reid says, “The influence of the political world on the corporate world is as strong as ever, but this year we’re seeing another risk emerge – the rise of AI in political campaigning and the potential for its misuse. CEOs are well aware of the need to integrate geopolitical turbulence in their strategic plans. But with many still unsure about their AI risk management processes, now is the time to revisit and refine strategies to help them navigate the business landscape that continues to be volatile and unpredictable.”
To read the full report, please visit: ey.com/CEOOutlook.
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About the January 2024 EY CEO Outlook Pulse
On behalf of EY, in December 2023 and January 2024 FT Longitude, the specialist research and content marketing division of the Financial Times Group, conducted a survey of 1,200 CEOs from large companies around the world. This anonymous online survey aims to provide valuable insights on the main trends and developments impacting the world’s leading companies as well as business leaders’ expectations for future growth and long-term value creation. Respondents represented 21 countries (Brazil, Canada, Mexico, the United States, Belgium, Luxembourg, the Netherlands, France, Germany, Italy, Denmark, Finland, Norway, Sweden, the United Kingdom, Australia, China, India, Japan, Singapore and South Korea) and five industries (consumer and health, financial services, industrials and energy, infrastructure, technology, media and telecoms). Surveyed companies’ annual global revenues were as follows: less than US$500m (19%), US$500m–US$999.9m (19%), US$1b–US$4.9b (30%) and greater than US$5b (32%).
In addition, FT Longitude conducted a survey of 300 private equity (PE) leaders from across 21 countries (Brazil, Canada, Mexico, the United States, Belgium, Luxembourg, the Netherlands, France, Germany, Italy, Denmark, Finland, Norway, Sweden, the United Kingdom, Australia, China, India, Japan, Singapore and South Korea). Surveyed institution’s assets under management (AUM): less than US$1b (15%), US$1b–US$9.99b (40%), US$10b–US$49.99b (25%) and US$50b or more (20%).
The CEO Imperative Series provides critical answers and actions to help CEOs reframe their organization’s future. For more insights in this series, visit ey.com/en_ie/ceo.
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