[SINGAPORE] Despite complex geopolitical and macroeconomic challenges, global chief executive officers are becoming more confident about business growth, latest findings from the EY-Parthenon CEO Outlook Survey indicated.
On Tuesday (Mar 18), the survey evaluated the optimism levels of 1,200 business leaders worldwide – 40 of the leaders were from Singapore – based on 15 “confidence index” measures.
Overall CEO confidence globally increased from 70.5 per cent in September 2024 to 73.5 per cent, even as concerns about rapid technological advancements, evolving sustainability agendas and ongoing geopolitical tensions persist. Nearly half, or 49 per cent, of the global respondents anticipate that these concerns will further escalate in 2025.
However, the outlook for CEOs in Singapore has taken a more cautious turn.
Overall CEO confidence for Singapore respondents experienced a significant dip from 72 per cent to 54 per cent, with prices and inflation being a major concern.
Andre Toh, modelling and economics leader for EY Asean and Asia-Pacific valuation, noted that the high costs of global operations, combined with geopolitical and macroeconomic uncertainty, pose a challenge for Singapore’s corporate leaders.
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“Further, as an open economy, Singapore is vulnerable to supply chain shocks and trade disruptions, which have been escalating in recent months. Until the dust settles and greater certainty returns to the business landscape, Singapore’s corporate leaders can be expected to be more cautious with their decision-making,” he added.
Still, more than half, or 56 per cent, of the Singapore respondents remain confident that they can successfully reimagine their business model for the future.
The survey also found that strategic vision and employee upskilling are considered essential for growth, with 85 per cent of CEO respondents believing that striking the right balance between human talent and new technology will be crucial for success.
However, over half of the Singapore respondents indicated that declining profitability could lead to workforce reductions.
Janet Truncale, chair and CEO of EY Global, said: “The survey reveals that the most confident CEOs are taking a long-term approach to transformation, focusing on enhancing customer and employee engagement amid macroeconomic and technological shifts, and always placing humans at the centre as the best path to sustainable value creation.”
On the global stage, the most confident CEOs are more focused on pursuing mergers and acquisitions (M&A) in the next 12 months, the survey found.
Although Singapore CEOs’ appetite for M&As slipped from 48 per cent to 40 per cent, a whopping 98 per cent of the Singapore respondents do intend to pursue transaction initiatives in the next 12 months.
These transactions may include M&A; divestments, spin-offs or IPOs; and joint ventures or strategic alliances.
The survey saw a shift in focus towards divestments and carve-outs, with a 20 per cent increase in Singapore CEOs planning such moves, suggesting further momentum to the deal market ahead.
2025 could see an uptick in megadeals, with 67 per cent of Singapore CEOs expecting to see an increase in deals more than US$10 billion.
When it comes to the top markets they intend to invest capital in, Singapore CEOs are focusing most on the local market, followed by the US, Malaysia, Indonesia and Hong Kong.
Global respondents are keen on the US, Canada, Germany, Mexico and the UK.
Sriram Changali, value creation leader for EY Asean, said that Singapore’s corporate leaders are “adapting to a new normal of complex change”. Asia continues to stand out as a region primed for growth, he added.
