PwC CEO survey: Middle East has most positive post-pandemic outlook
Professional services firm PwC’s latest global CEO survey has found that Middle East leaders are particularly optimistic about medium-term growth, with substantial investments in digital transformation a core strategy for accelerating out of the pandemic.
The Middle East’s leading chief executives are especially optimistic for growth in the coming years according to findings from professional services firm PwC’s latest CEO survey, with such confidence and the lessons learned from Covid-19 driving intentions for heightened investments in digital transformation. “While there is still uncertainty across the region, for Middle East CEOs, tomorrow starts today,” said PwC Middle East Senior Partner Hani Ashkar.
For the 24th edition of its Global CEO Survey, PwC canvassed the sentiments of more than 5,000 CEOs operating in 100 countries and territories, and altogether more than half of the Middle East respondents were very confident that their organisation’s revenues would grow in the coming three years, at a rate of 52 percent compared to 47 percent among their global peers. The results represent the sharpest rebound in positive outlook for any region, up from 19 percent just prior to the pandemic.
While the worldwide rate of confidence among CEOs for improved global economic growth this year is marginally higher than that of the Middle East, at 76 percent against 72 percent, the local figures here are likewise a massive jump from late 2019, when just 11 percent of Middle East CEOs could foresee upward growth for the global economy. Still, when it comes to a quick rebound and the next 12 months alone, local CEOs remain sceptical, with just 31 expecting revenue growth.
The lower confidence in the current global economy and an immediate revenue turnaround, contrasted with the greater optimism for medium-term revenue growth, suggests Middle East CEOs may be deriving their heightened confidence from another source. Here, almost 60 percent of regional respondents indicated they would increase their investments in digital transformation by 10 percent or greater over the next three years – an area which the region has previously lagged in.
Noted as a direct response to the impact of Covid-19, this rate of heavy investment into digital transformation initiatives easily eclipses the global figure of 49 percent, and marks a shifting mindset in the region. As a comparison, ten years ago in the aftermath of the global financial crisis barely one in ten Middle East CEO’s planned a significant increase in digital investments. Accordingly, productivity through automation and technology is now a top workforce priority.
Having a skilled, educated and adaptable workforce is also now a greater business priority for local CEOs as compared to those elsewhere, at a 70 percent response rate. “Planned digital investments will only realise their full potential if organisations ensure that employees are up-skilled to utilise Artificial Intelligence (AI), robotics, machine learning and other new technologies,” commented PwC Middle East’s Strategy and Markets Leader, Stephen Anderson.
Elsewhere, at above three quarters of respondents, both regional and global CEOs cited a focus on operational efficiencies as their primary strategic growth driver over the coming twelve months, no doubt as a response to the shocks of Covid-19 at the lessons learned, while the greatest strategic divergences between global and regional CEOs could be seen in their intentions for pursuing M&A and overall organic growth, with local businesses leaning mostly toward new market entries.
Overall, only half of regional CEOs compared to 72 percent worldwide were looking to organic growth, yet Middle East CEOs planned to enter a new market at a rate of 35 percent compared to 29 percent (at just 26 percent, Middle Eastern interest in M&A was also 12 points lower than the global response). Here, Egypt was by far the most popular potential growth market, drawing the attention of more than a third of respondents, while a quarter pointed to each the KSA and UAE.
“After successfully navigating the uncertainty brought about as a result of the Covid-19 pandemic, companies have emerged more resilient and agile than ever before,” concluded Ashkar on the findings. “Middle East CEOs are cautious but optimistic. It’s clear that in order to continue to thrive, companies will need to embed lessons learnt as a result of the pandemic to transform their operations, continue to drive investments, and secure the well-being of their people.”