Irish News

Most Irish CEOs expect Ireland to avoid recession despite economic concerns

By Business & Finance
13 October 2022

The seventh KPMG Irish CEO Outlook reveals that CEOs in Ireland are optimistic Ireland will avoid recession despite the economic uncertainties presented by inflation and supply chain concerns amongst others.

CEOs in Ireland are facing a range of new uncertainties including geopolitical risks, inflation and supply chain concerns as well as the traditional challenge of attracting and retaining talent.

While 40 percent expect to see this impacting the economy in the short term, they are considerably more confident about the prospects for the economy in the year ahead than their global peers are about their own markets.

The seventh KPMG Irish CEO Outlook conducted between mid-July and late August shows that the majority of those surveyed are predicting growth between 2.5 and 10 percent over the next 3 years as they focus on their key priorities advancing digital transformation strategies and actively looking at new growth opportunities through M&A activity.

You can read the KPMG Irish CEO Outlook 2022 here.

Irish CEOs relatively more optimistic on recession concerns

The report – representing the views of CEOs from some of Irelands largest companies – found that 68 percent of those surveyed expect the Irish economy to avoid recession in the year ahead, a more optimistic outlook than the global view where 86 percent of CEO’s expect a recession in their domestic market.

However, were a recession to occur, 8 in 10 (80 percent) of Irish CEO’s say it would cause further disruption to their business and make it difficult to rebound from the pandemic, broadly in line with global sentiment.

Commenting on the report findings, KPMG Managing Partner Seamus Hand said:

“The global economy is currently facing significant headwinds and many businesses are having to adapt quickly to manage the impact of this. While Ireland is not immune to these challenges, it is clear from the results in our report that Irish CEOs believe that the economy is resilient and remains in a strong position relative to other markets thus enabling it to weather this storm. While Irish CEOs are navigating short term challenges, they are very confident in the growth prospects for their companies and the Irish economy over the next three years.”

Economic factors – the most immediate business concerns for Irish CEOs are rising interest rates, inflation and continued supply chain interruption. Looking further ahead, they said the top threat to their organisation’s growth over the next three years remains supply chain risk, followed by risk in relation to emerging and disruptive technology, reputation and tax changes.

Ireland’s CEOs seeing an upside in productivity and retention as a result of hybrid working

Hybrid working has proven to have had a positive impact on productivity in the workplace according to 64 percent of local CEOs – significantly ahead of the 44 percent globally. It has also had a greater impact on collaboration and innovation in the workplace with over two-thirds (72 percent) saying it has helped keep staff compared with 49 percent globally.

They are however equally seeing some challenges with over a third (36 percent) seeing a negative impact on employee morale.

According to Mr. Hand, “The future of work is constantly evolving, however we see a clear pattern where the office remains central to ensuring people feel connected, for learning and development and for building working relationships. This is complemented by the flexibility hybrid working affords employees.”

Technology transformation continues but signs of investment being deferred

A large majority of Irish CEOs (76 percent) continue to invest heavily in their digital capabilities and said they have aggressive digital transformation strategies intended to secure first mover or fast-follower status, a similar result to their peer group globally (71 percent). However, recessionary concerns for some mean over a third (36 percent) of Ireland’s business leaders have slowed the implementation of their digital transformation strategy.

ESG increasingly becoming a priority for CEOs, but lack of appropriate technology solutions seen as a key challenge

Environmental, social and governance (ESG) matters are now a key aspect of financial performance as 80 percent of Irish CEOs are seeing increased demand for reporting and transparency from regulators and investors. A total of 44 percent of Irish CEOs said they see lack of appropriate technology solutions as their greatest barrier to achieving net zero ambitions– a significantly higher proportion when compared with their global peers (18 percent).

About KPMG’s CEO Outlook

Now in its seventh year, the KPMG CEO Outlook provides an in-depth three-year outlook from hundreds of global executives including 50 CEOs from Ireland on strategic risk and opportunity, enterprise, and economic growth. Each year the report builds upon answers from previous surveys to help ensure a consistent year-over-year view of the global economy. It also includes new and changing questions to capture CEOs’ outlook on trending topics in the market.

The 2022 survey covers over 1,300 CEOs in key markets (Australia, China, France, Germany, India, Ireland, Italy, Japan, Netherlands, Spain, UK and US) and 11 key industry sectors (asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology, and telecommunications).

A third of the companies surveyed have more than US$10B in annual revenue, with no responses from companies under US$500M. The survey was conducted between July 12 and August 24 2022. NOTE: some figures may not add up to 100 percent due to rounding.

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