EY’s CEO Outlook Pulse survey of business leaders’ opinions, conducted worldwide, reveals that an overwhelming majority of business leaders expect results to improve this year – in Europe, 57% of business leaders expect revenue to increase, while a third expect them to remain at last year’s level. Only 9% think that the company’s revenue will decrease. Likewise, 59% of business managers in Europe expect higher profits this year, while a third think they will be the same as last year. Only 9% are pessimistic and expect lower profits this year.
The mood of entrepreneurs in Europe is less optimistic than in the world as a whole, where even 64% of company managers expect an increase in revenue this year, and higher profits – 63%. Likewise, a third expects these indicators to remain at last year’s level.
“It is interesting that the positive mood of entrepreneurs can be observed despite low economic growth. In our research, 76% of business managers in the world expect only low GDP growth or even stagnation this year, while 78% think that high financing interest rates will remain for a longer time. Business managers apparently believe that they have adapted well to the current situation and see good opportunities for recovery after a relatively unfavorable last year,” says Guntars Krol, EY Partner, Head of the Strategy and Transaction Consulting Department in the Baltic States
At the same time, more than half of business managers in Europe (56%) and in the world as a whole (57%) expect that the costs of operating companies will also increase this year, even despite a significant slowdown in inflation. Only 8% in Europe and 6% globally think operating costs will decrease this year.
The EY study shows that 32% of business owners in Europe (and 36% globally) expect to be able to offset all of the increase in operating costs through higher prices, while 52% of executives in Europe (and 49% globally) believe that higher prices will be able to offset more as half the cost increase. Only 1% of business leaders in the world think that they will not be able to recover anything from the increase in costs with higher prices, but there are no such business leaders in Europe.
Company managers also look optimistically at acquisitions or mergers of other companies (so-called M&A or mergers & acquisitions). 36% of company managers in the world are planning such a transaction in the next 12 months, while 29% are considering the possibility of selling one of the company’s assets.
In the EY CEO Outlook Pulse study, EY in partnership with FT Longitude surveyed 1,200 CEOs in 21 countries. The research was conducted in December 2023 and January of this year. In addition, 300 managers of private capital investment (private equity) companies, also in 21 countries, were surveyed in the study.
2024-02-11 16:06:18
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