Middle East CEOs confident about economic growth in 2023, finds PwC survey

Middle East CEOs are “optimistic” about the region’s economic growth prospects, with around two-thirds of the region’s business leaders expecting an improvement this year, revealed the Middle East findings of the 26th edition of PwC’s global CEO survey.

The survey, which polled 4,400 CEOs in 64 countries, found that Middle East CEOs are confident in regional growth and are transforming their businesses by embracing new technologies, investing, driving cost efficiencies, moving on deal activity and taking active steps to mitigate the risk of climate change.

However, CEOs hold a pessimistic per cent view on the outlook for the global economy with 73 per cent of global CEOs and 82 per cent of regional CEOs expecting a decline in global growth over the next 12 months.

Just 21 per cent of North American CEOs and 18 per cent of  European CEOs are confident in revenue growth in their own markets. This contrasts sharply with the picture in the Middle East where 63 per cent of regional CEOs are confident about their own companies’ revenue growth over the next 12 months, with 71 per cent of senior executives confident about their outlook for the next three years.

Hani Ashkar, PwC Middle East Senior Partner, said: “In last year’s survey, CEOs in the region were optimistic about their near-term economic prospects. Today, macroeconomic volatility and geopolitical tensions are undoubtedly impacting the confidence of global CEOs’ outlook for the year ahead. However, responses from Middle East leaders for our 26th Annual CEO Survey paint an encouraging picture for 2023, with almost 61 per cent of Middle East CEOs expecting regional economic growth to improve in 2023.”

At a time of global economic uncertainty, Middle East CEOs are a shining beacon of optimism on the region’s growth prospects. Hear more on the outlook for 2023 and the emerging themes from our 26th Annual CEO Survey – Middle East report: https://t.co/sX6fJufA4n #CEOSurveyME pic.twitter.com/9gdlSh55Wq

— PwC Middle East (@PwC_Middle_East) January 24, 2023

Transforming business to ensure long-term viability

According to the survey, Middle East CEOs are actively preparing for a dynamic period ahead with 58 per cent of CEOs already transforming and strengthening their businesses. Unlike their global peers, regional business leaders are proactively accelerating merger and acquisition activity with 76 per cent not delaying deals versus 60 per cent globally. Nor are they slowing down on investments with 58  chains, with more than 70 per cent looking to push through price increases and 84 per cent seeking to reduce operating costs.

Investing in digitalisation and talent

As the Middle East continues with its ambitious digital transformation agenda, this year’s survey found that two-thirds of regional CEOs view technological disruption as a leading issue that will affect their industry’s profitability over the next decade, compared with just under half of global CEOs.

This year’s survey indicates that the region’s senior executives foresee technology as a prominent feature in their plans with more than four in five regional CEOs expecting to invest in automation processes and systems in 2023, and 66 per cent expecting to deploy cloud technology, artificial intelligence, and other advanced technologies in operations.

Attracting and retaining talent also remains a key focus with 74 per cent of the CEOs expecting to invest in reskilling their workforce, in addition to 84 per cent of regional leaders planning on not reducing staff compensation.

Taking action to mitigate climate risk

Over the last 12 months, the region has significantly deepened its commitment to tackling climate change with government and private-sector pledges committing to meeting national net-zero targets, with momentum no doubt accelerated by the recent COP27 summit in Egypt and the upcoming COP28 summit in the UAE. This new sustainability mindset has resulted in almost 50 per cent of Middle East CEOs taking steps to mitigate climate risk or innovating new products and processes to lower their carbon footprint and cut emissions.

 Stephen Anderson, PwC Middle East Strategy and Markets leader, said: “CEOs are turbocharging digital transformation through further investment and, as the ESG agenda continues to play an important and strategic role in reimagining a sustainable future for our region, it is evident from our latest survey that the story has moved from talk and reflection to action when it comes to climate change.”