UK CEOs lose confidence in global growth

Less than half of UK CEOs are confident about growth prospects for the global economy, but despite continuing Brexit uncertainties, a significant proportion of global CEOs still see the UK as an attractive investment destination, a KPMG survey has found

The drop in UK confidence levels marked a significant fall of 34 percentage points year-on-year and reflected deep-rooted concerns over geopolitical stability, trade wars and the persistent rise of economic nationalism, revealed the 2019 KPMG CEO Outlook. .

On a more positive note, CEOs from the US, China and Japan – the UK’s top inward investor and the second and third biggest global economies – said they were on average now more likely to invest in the UK post-Brexit.

In contrast, European company heads based in the largest EU countries - France, Germany, Italy, Spain and the Netherlands – said they were less likely to invest in the UK after the country leaves the EU.

Bill Michael, chairman and senior partner at KPMG in the UK, said: ‘These are testing times for chief executives in the UK. The continued uncertainty over Brexit has made it harder for leaders to make big calls on investment. At the same time, disruption from emerging technology, climate change and fragile geopolitical and trade conditions have created one of the most complex backdrops to operate against in recent times.’

The top three risks to growth were emerging technology, climate change and economic nationalism.

Despite technology dominating UK CEOs’ risk agenda, only half of respondents said their companies needed to be more innovative, much lower than in the other countries surveyed. By contrast, 80% of Dutch CEOs said they needed to improve their innovation processes and execution.

Michael said: ‘A sustainable business must have a backbone of creativity and innovation. Getting this right is critical, or companies will struggle to react to rapid changes in the market and the threat of new digital entrants. For many, it’s transform or die.’

The 2019 KPMG CEO Outlook is based on research with 1,300 CEOs in Australia, China, France, Germany, India, Italy, Japan, Netherlands, Spain, UK and US. Of these, 150 ran companies in the UK.

Pat Sweet

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