- 85% of Asia-Pacific CEOs express optimism about the global market outlook, with Chinese CEOs leading this shift. This sentiment is notably higher among Asia-Pacific CEOs than that of their European or American counterparts.
- CEOs expect an uptick in megadeal M&A activity as Asia-Pacific markets recover and companies commit to big ticket investments and closing deals.
- Disruptive forces including accelerating AI adoption, rise in employee turnover and an escalation of geopolitical conflicts casts a concerning shadow.
Confidence among Asia-Pacific CEOs is increasing despite complex geopolitical and macroeconomic challenges, according to the latest EY-Parthenon CEO Outlook Survey: Global Confidence Index, which evaluates the optimism levels of 1,200 global business leaders based on 15 ‘Confidence Index’ measures. The latest survey data was recorded after the 2024 US election and offers insights on leaders’ expectations for future growth and long-term value creation at many of the world’s leading companies.
CEOs in Asia-Pacific are keenly focused on adapting to geopolitical and economic shifts, anticipating regulatory changes, and leveraging potential economic policies that could impact their operations in the region. Notably, 85% of Asia-Pacific CEOs express optimism about the global market outlook, a significant increase from 69% in the previous quarter. This represents a marked divergence from the more tempered views held by CEOs in the Americas (74%) and Europe (81%).
Patrick Winter, EY Asia-Pacific Area Managing Partner, says:
“We are witnessing a shift from the widespread pessimism that characterized Asia-Pacific in recent years to a surge in optimism, largely fueled by the anticipated rise in strategic M&A activity and a strong focus on AI adoption. As organizations navigate this evolving landscape, they are fine-tuning their strategic priorities, which include enhancing employee engagement, leveraging technology for growth, and building resilience against potential disruptions.”
The survey highlights the need for a strategic vision and investment in people, emphasizing the importance of leaders focusing on employee engagement, as improving economic conditions could lead to higher turnover. As part of their retention and overall transformation strategy, leaders need to upskill their workforce to keep pace with technological innovation. According to 87% of the surveyed CEOs, the accelerated adoption of AI will be a key differentiator in the coming years.
In addition to focusing on employee engagement, CEOs are leveraging deals to achieve their transformation goals more rapidly. Technology acquisitions are driving innovation, while firms are divesting non-core assets to simplify their business models, sharpen their focus, and unlock greater shareholder value. They are also seeking to strengthen their ecosystems through targeted partnerships and joint ventures
2025 set to be a bumper year for dealmaking
The overall appetite among Asia-Pacific CEOs for mergers and acquisitions (M&A) in the next year has increased significantly, rising to 61% from 39% in September 2024. This signals that a rebound is on the horizon for deals in 2025, continuing the upward trend of resilient M&A activity recorded in 2024.
Shannon Cotter, EY Asia-Pacific Strategy and Transactions Leader, says:
“There is a strong appetite for strategic deals among CEOs in Asia-Pacific, with over half considering some type of M&A deal in the next 12 months. This underscores their commitment to enhancing competitive positioning and creating a more confident future as they look to the rest of 2025 and beyond.”
There are also indications that 2025 could see an uptick in mega-deals, with 60% of global CEOs expecting to see an increase in deals over US$10b. Nearly half of Asia-Pacific CEOs are also looking to sell assets, with 51% planning a divestment or carve-out, up from 42% in September 2024 – adding further momentum to the deal market in the year ahead.
Despite the optimism and plans for more deals, CEOs will need to remain vigilant to geopolitical risks, particularly related to US-China relations under President Trump's administration.
Cotter adds: "The Asia-Pacific region has always presented a diverse and complex business environment. Coupled with global macro issues, CEOs must demonstrate adaptability to meet the demands of rapid developments in the business landscape and confidently implement strategies to navigate the trends anticipated for 2025."
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About the survey
On behalf of the global EY organization, in November and December 2024, FT Longitude, the specialist research and content marketing division of the Financial Times Group, conducted an anonymous online survey of 1,200 CEOs from large companies around the world that 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 20 countries (Brazil, Canada, Mexico, the United States, Belgium, Luxembourg, the Netherlands, France, Germany, Italy, Denmark, Finland, Norway, 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 (20%), US$500m–US$999.9m (20%), US$1b–US$4.9b (30%) and greater than US$5b (30%).
The CEO Confidence Index is a measure of executives’ outlook on the macroeconomic environment and company performance, derived from data collected as part of the EY-Parthenon CEO Outlook Survey. CEOs rated their outlook on 15 statements using a 5-point scale ranging from "very pessimistic" (0) to "very optimistic" (100). These responses were categorized into five thematic groups: sector growth, prices and inflation, company growth, talent, and investment and technology. Higher Index values indicate a more positive sentiment regarding the future state of the economy and their businesses. An index of 100 is fully optimistic, 50 is neutral, and 0 is fully pessimistic.