US chief executive officers remain fairly optimistic despite the wide-ranging negative impacts of the global pandemic, according to KPMG’s annual CEO Outlook survey. The consulting firm polled 1,300 global CEOs in January and February, and then did a follow-up survey of 315 CEOs in July and August.
Forty-three percent of US CEOs said they were confident in the growth prospects of the domestic economy, similar to the global average of 45%. However, the pandemic has predictably caused a decline in confidence: one-third of global CEOs said they are less confident than they were in January about the growth prospects for their country over the next three years.
More US CEOs (37%) were confident about global economic growth prospects than the worldwide average (32%), but were slightly less confident (60%) than global CEOs (67%) in regard to their company’s growth prospects in the next three years.
US CEOs expect low to moderate growth for their companies, with 39% projecting 2.5%-5% growth, 33% projecting 0.1%-2.5% growth, and 14% projecting zero or negative growth. US CEOs are slightly more confident than global CEOs, 35% of whom expect 2.5%-5% growth and 23% of whom expect zero or negative growth in the next three years.
“US CEOs are resilient and remain optimistic as they continue to rise to meet the challenges and opportunities resulting from the pandemic and ongoing economic uncertainty,” said Paul Knopp, KPMG US chair and CEO. “They are accelerating the digital transformation of their businesses, but also see a multitude of risks apart from the pandemic – with talent risk becoming front and center in the current environment.”
American chief executives tagged environmental/climate change risk (21%), talent risk (20%), a return to territorialism (18%), and supply chain risk (15%) as the top risks to their organization over the next three years, aside from the pandemic. These were also the top risks identified by global CEOs, though the order of importance was reshuffled: talent risk (21%), supply chain risk (18%), territorialism (14%), and climate change (12%).
The KPMG report found that US leaders are accelerating digital investments because of the pandemic. The top areas were digitization of operations (74%), creation of a seamless digital customer experience (73%), and creation of digital business models and revenue streams (70%).
The report also found that US CEOs are prioritizing investment into new technology/digitization (74%) over upskilling their workers (26%).
US CEOs confirmed that the pandemic has greatly impacted their ways of working. Sixty-eight percent said they will downsize their office space, while 76% said they will continue to expand their use of digital collaboration and communication tools.
The pandemic has also caused many leaders to focus more on corporate social responsibility, with 76% saying they need to reevaluate their corporate purpose to better address the needs of stakeholders. Fifty-eight percent of US CEOs said the pandemic has shifted their focus to the social component of their environmental, social, and governance (ESG) program, with 67% reporting that they have already – or plan to – institute new measures that combat discrimination against Black employees.
“As much as Covid-19 changed how people work and how organizations invest in technology, companies are re-assessing their values and purpose,” Knopp added. “CEOs also are placing a greater emphasis on employee engagement and corporate culture in this new working reality.”