Broad-based confidence in domestic corporate earnings and short-term market stability are further fueling their optimism, as are modest increases in key financial metrics such as profitability.
It’s a trend Greek executives expect will continue, with 57% anticipating modest to strong increases in revenues and 42% expecting a rise in profit margins over the next 12 months. At the same time, 66% predict that input costs, excluding employee costs, will stay the same or modestly decline in the coming year.
Regulatory and geopolitical uncertainty raise concerns
Despite their confidence in the growth potential of the global and local economies in the next 12 months, a majority (55%) of Greek executives foresee an economic slowdown. Of these, 77% see it occurring by 2021 or earlier.
Key issues raising these concerns include geopolitical and political uncertainty, as well as regulatory uncertainty, supply chain disruption and new environmental policies. Concerns related to political and regulatory uncertainty primarily stem from the political upheavals of the last five years, combined with tensions in the Southeast Mediterranean.
However, where global respondents are taking more of a wait-and-see attitude toward external uncertainties, Greek companies are more inclined to act. Nearly one in five (18%) Greek respondents say their companies are moving offices and management into or out of certain countries. Other options they’re weighing include reconfiguring their supply chains (16%) and reducing outsourcing (15%).
M&A appetite reaches an all-time high
Riding the wave of confidence in their growth prospects, an all-time-high 62% of Greek executives say they will be pursuing M&A in the next year. Meanwhile, their M&A outlook remains positive but more moderate than a year ago, with 56% expecting the domestic M&A market to improve in the next 12 months (versus 83% in October 2018).
Respondents expect to target assets that offer transitional capabilities, including digital technologies and new routes to customers. However, they are expecting competition, primarily from private capital, which could drive up valuations.