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business executives are optimistic about economic growth in the next 12 months, up from 70.5% in September. The survey highlights regional sentiment, adaptation to economic realities, sector-specific optimism, and anticipated M&A activity.">
business executives, EY Parthenon, CEO Outlook Survey, M&A activity, global economy, trade tariffs, digitization, strategic realignment"> business-executives-optimism"> Business Executives Express Rising Optimism for Economic Growth, EY Survey Reveals">
business executives are optimistic about economic growth in the next 12 months, up from 70.5% in September.">
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Global business Executives Express Rising optimism for Economic Growth, EY Survey Reveals
Table of Contents
- Global business Executives Express Rising optimism for Economic Growth, EY Survey Reveals
- Regional Sentiment Remains Strong
- Adapting to the New Economic Reality
- Sector-Specific optimism
- Increased M&A Activity Anticipated
- Strategic Realignment and Divestitures
- About the EY CEO Outlook survey
- Conclusion
- Global CEO Optimism: Is the Economic Tide Turning? An Exclusive Interview
- Global CEO Optimism: Is the Economic Tide Turning? An Exclusive Interview
A recent study by EY parthenon indicates a meaningful increase in optimism among global business leaders regarding the economic outlook. The latest EY Parthenon CEO Outlook Survey, a quarterly assessment, reveals that 75% of business executives expressed optimism about global economic growth over the next 12 months as of January. This marks a notable rise from September, when 70.5% of executives shared the same sentiment. The survey encompasses opinions from various regions and countries, providing a comprehensive view of executive sentiment worldwide, signaling a potential shift in economic confidence.
The EY CEO outlook Survey, conducted quarterly, serves as a barometer of global business sentiment, and the January figures underscore a growing confidence in the economic trajectory. The increase in optimism compared to the previous survey in September suggests a broad-based expectation of economic advancement across various sectors and regions. This positive outlook provides valuable insights into the strategic thinking of business leaders as thay navigate the complexities of the global marketplace.
Regional Sentiment Remains Strong
The survey indicates that optimism is not confined to a single geographic area. For example, in Germany, 73.5% of business executives are optimistic, while in the Nordic countries of Europe, the figure stands at 74%. France reports a similar level of optimism, with 72% of executives expressing a positive outlook. On average, 72.5% of company executives are optimistic about thier own country’s economic growth in the next year, compared to 70% in September of the previous year. This consistency across different European nations suggests a shared expectation of economic advancement and highlights the interconnectedness of the global economy.
Adapting to the New Economic Reality
According to Guntars Krols, EY partner, head of strategy and business consulting at the Baltic States, business leaders are adapting to the current economic landscape, demonstrating resilience in the face of ongoing challenges.
“The sentiment of managers improves even though macroeconomic forecasts for this year are on average only low or moderate growth. Company executives positively assess inflation stabilization, increasingly lower funding rates, and generally adapt to the new economic reality, where geopolitical conflicts still play a major role. It is the ability to adapt to what allows you to look optimistic about the next year and I think it also describes companies in Latvia – we get used to and understand how to work during the progress of a slow economy.”
Guntars Krols, EY partner, head of strategy and business consulting at the Baltic States
Krols also cautioned about potential disruptions to the global economy, specifically mentioning trade tariffs and their potential impact on macroeconomic indicators.
“However, it is necessary to look at the impact on the global economies vrey recently in the US and a series of trade tariffs introduced by other countries. Theoretically, they create a new uncertainty about a whole series of macroeconomic indicator and can reduce the economic growth rate, create a new and inflation wave. However, the effects of tariffs will not be steady in all countries and regions. It is too early to judge this.”
Guntars Krols, EY partner, head of strategy and business consulting at the Baltic States
Sector-Specific optimism
The EY study also highlights variations in optimism across different economic sectors. Managers in the technology industry are the most optimistic about their company’s growth in the next year, with 82% expressing a positive outlook. The health sector follows closely behind at 81.5%, and retail comes in third at 81%. In contrast, companies in the entertainment field (60.5%) and mobility sectors (66%) are the least optimistic about growth. These differences likely reflect the specific challenges and opportunities facing each industry,influenced by factors such as technological advancements,regulatory changes,and shifting consumer preferences.
Increased M&A Activity Anticipated
The study indicates a growing readiness among business executives to engage in mergers and acquisitions (M&A).In January, 56% of business executives (and 55% in Europe) stated that they were planning to introduce an M&A deal in the next 12 months.This represents a significant increase from September, when only 37% expressed similar intentions. This surge in interest suggests that business leaders are increasingly anticipating new growth opportunities in the global economy. The primary driver of M&A transactions is digitization,with companies seeking to acquire new technology capabilities,particularly in the field of artificial intelligence (AI) solutions.
Krols noted the increasing M&A activity and the drivers behind it, emphasizing the role of technology and innovation in shaping corporate strategies.
“Already last year there was a higher M&A activity – the total value of transactions increased by 14% and the number of transactions by 8% compared to 2023.Our study shows that this year there should be a further increase in business appetite, which can be explained both at lower interest rates and, accordingly, cheaper financing, and mainly that companies do not want to miss new technology opportunities. It is indeed the excitement that competitors in innovation are moving faster to be an significant reason for companies to look for new M&A business opportunities.”
Guntars Krols, EY partner, head of strategy and business consulting at the Baltic States
Strategic Realignment and Divestitures
Along with M&A activity, a significant proportion of company executives are considering strategic realignments. According to the study, 48% of company executives (and 39% in Europe) are planning to sell or separate assets of their companies in the next year, or intend to implement an initial public offering (IPO). Furthermore, 62% of executives worldwide (64% in Europe) plan to establish strategic alliances or joint ventures in the next 12 months. Interestingly, only 4% of EY study participants do not plan any active deals in the company, either globally or in Europe, in the next year. This indicates a widespread focus on strategic initiatives and deal-making across the business landscape, reflecting a proactive approach to adapting to evolving market conditions.
About the EY CEO Outlook survey
the EY CEO Outlook Survey is conducted by EY in collaboration with FT Longitude, a sociological research unit of the Financial Times Group. The study surveys 1,200 executives of large companies around the world, gathering data on each region. The survey is conducted every quarter, providing a regular snapshot of executive sentiment and business trends, offering valuable insights for policymakers, investors, and business leaders alike.
Conclusion
the latest EY Parthenon CEO Outlook Survey paints a picture of increasing optimism among global business executives. With 75% expressing confidence in economic growth, and a significant proportion planning M&A activity and strategic realignments, the survey suggests a dynamic and forward-looking business environment. While potential challenges such as trade tariffs remain, the overall sentiment points towards a positive trajectory for the global economy, driven by adaptation, innovation, and strategic deal-making.
Global CEO Optimism: Is the Economic Tide Turning? An Exclusive Interview
seventy-five percent of global business executives express optimism about economic growth—a notable surge from previous quarters. But is this optimism justified, or is it a bubble waiting to burst?
Interviewer (Senior Editor, world-today-news.com): Dr. Anya Sharma, renowned economist and expert in global business trends, welcome to world-today-news.com. The EY Parthenon CEO Outlook Survey reveals a significant upswing in executive optimism. What are the key drivers behind this surge in positive sentiment?
Dr. Sharma: Thank you for having me. The increased optimism reflected in the EY survey isn’t simply hope springs eternal.
It’s a confluence of factors suggesting a shift in the global economic landscape. Several key drivers contribute to this positive sentiment among CEOs:
- Inflation Stabilization: The recent moderation in inflation rates across many regions provides a much-needed sense of stability. This allows businesses to better predict costs and make more informed investment decisions. Reduced uncertainty is a key ingredient for sustained growth.
- Lower Funding Rates: Lower borrowing costs enable businesses to access capital more easily, fostering investment in new projects, expansion, and innovation. This increased access to finance fuels economic expansion and job creation.
- Adaptation to Geopolitical Uncertainty: While geopolitical conflicts remain, businesses are demonstrating remarkable resilience and adaptability. They are refining their strategies to navigate these challenges, demonstrating a capacity to thrive even in uncertain circumstances. This proactive approach bolsters confidence in future prospects.
- Technological Advancements: Rapid advancements in areas like artificial intelligence and automation are creating new opportunities for businesses to enhance efficiency, streamline operations, and develop innovative products and services, leading to a more positive outlook, particularly within the technology sector.
Interviewer: The survey highlights regional variations in optimism. While Europe shows strong positive sentiment, are there any regions lagging behind, and what factors contribute to these disparities?
Dr.sharma: While the overall global sentiment is positive, regional differences persist. It’s crucial to understand the nuances. Certain developing economies might face challenges related to infrastructure limitations, political instability, or access to financial resources, preventing them from sharing the same level of optimism seen in more developed regions.Such as, regions experiencing significant political turmoil or internal conflict are likely to exhibit lower executive optimism due to heightened uncertainty and risk aversion. Analyzing these disparities requires a granular understanding of the specific economic and political circumstances impacting individual regions.
Interviewer: The survey strongly suggests a significant upcoming increase in mergers and acquisitions (M&A) activity. What are the primary drivers of this anticipated surge, and what sectors are most likely to experience this growth?
Dr. Sharma: The significant increase in planned M&A activity is primarily driven by companies striving to achieve greater economies of
Global CEO Optimism: Is the Economic Tide Turning? An Exclusive Interview
Seventy-five percent of global business executives are optimistic about economic growth—a meaningful leap from previous quarters. But is this a genuine shift, or a fleeting moment of optimism before the next downturn?
Interviewer (Senior Editor, world-today-news.com): Dr. Anya Sharma, renowned economist and expert in global business trends, welcome to world-today-news.com. the EY Parthenon CEO Outlook Survey reveals a significant upswing in executive optimism. What are the key drivers behind this surge in positive sentiment?
Dr. Sharma: Thank you for having me. The increased optimism reflected in the EY survey isn’t simply “hope springs eternal.” It’s a confluence of factors suggesting a basic shift in the global economic landscape. Several key drivers contribute to this positive sentiment among CEOs:
Inflation Stabilization: The recent moderation in inflation rates across many regions provides much-needed stability. This allows businesses to better predict costs and make more informed investment decisions. Reduced uncertainty is crucial for sustained growth and a key reason for enhanced CEO confidence.
Lower Funding Rates: Lower borrowing costs enable businesses to access capital more easily, fostering investment in new projects, expansion, and innovation. This increased access to finance fuels economic expansion and job creation, directly impacting business optimism.
Adaptation to Geopolitical Uncertainty: While geopolitical conflicts and trade tensions persist, businesses are demonstrating remarkable resilience and adaptability. Thay’re refining strategies to navigate these challenges,showing a capacity to thrive even in uncertain circumstances. This proactive approach bolsters confidence in future prospects.
Technological Advancements: Rapid advancements in areas like artificial intelligence and machine learning are creating new opportunities for businesses to enhance efficiency, streamline operations, and develop innovative products and services. This leads to a more positive outlook, especially within the technology, healthcare, and retail sectors.
Interviewer: The survey highlights regional variations in optimism. While Europe shows strong positive sentiment, are there any regions lagging behind, and what factors contribute to these disparities?
Dr. Sharma: While the overall global sentiment is positive, regional differences persist. It’s crucial to understand the nuances. certain developing economies might face challenges related to infrastructure limitations,political instability,or access to financial resources,preventing them from sharing the same level of optimism seen in more developed regions. Such as, regions experiencing significant political turmoil or internal conflict are likely to exhibit lower executive optimism due to heightened uncertainty and risk aversion. Analyzing these disparities requires a granular understanding of the specific economic and political circumstances impacting individual regions. The availability of skilled labour and access to global supply chains also play critical roles.
Interviewer: The survey strongly suggests a significant upcoming increase in mergers and acquisitions (M&A) activity. What are the primary drivers of this anticipated surge, and what sectors are most likely to experience this growth?
Dr. Sharma: The significant increase in planned M&A activity is primarily driven by companies striving to achieve greater economies of scale, expand market share, and acquire innovative technologies. Companies are looking to consolidate their positions in various sectors, and this is creating a wave of mergers and acquisitions. This is particularly true in sectors like technology,where companies are aggressively pursuing artificial intelligence capabilities and other cutting-edge innovations. We anticipate the technology sector, healthcare, and potentially even the struggling mobility sector will see increased M&A activity as companies strategically reposition themselves in response to technological disruption and market shifts. This increased activity helps drive economic growth on a larger scale.
Interviewer: The survey also mentions strategic realignments and divestitures. Can you elaborate on this trend and its implications for the global economy?
Dr. Sharma: Strategic realignment reflects a proactive approach to adapting to economic and market evolution. Companies are shedding non-performing assets (divestitures) and seeking synergistic partnerships (joint ventures). This streamlining allows them to focus resources on core competencies and high-growth areas. This strategic repositioning is a vital component of businesses adapting to economic shifts and fostering more efficient resource allocation leading to a healthier,more responsive global economy.
Interviewer: what are your overall thoughts on the future of the global economy,considering the findings of the EY survey?
Dr. Sharma: The EY survey’s findings suggest a positive sentiment among business leaders, underpinned by various factors, including inflation stabilization and accessibility to capital. However, it’s critical to acknowledge that regional disparities exist and that geopolitical uncertainties remain. This optimistic outlook is paired with strategic planning, including mergers and acquisitions and proactive asset realignments indicating that businesses are adapting and strategically positioning themselves for long-term success. The combination of both cautious optimism and proactive strategic planning suggests a promising, albeit complex, economic landscape ahead.
Concluding Thoughts: The heightened optimism and strategic initiatives observed in the EY Parthenon CEO Outlook Survey signal promising developments. However, a nuanced perspective acknowledging regional differences and ongoing challenges is essential.Share your thoughts on the future of the global economy in the comments below!
