In a major new study released by KPMG International, which tracks insights on the coming three years, chief executives of global businesses said they are confident about the ability of their companies to grow over the next three years and are expressing confidence about the prospects for the global economy.
According to the 2015 KPMG CEO Outlook Study of 1,278 CEOs, 69 percent of CEOs in Europe, 66 percent in Asia Pacific and 52 percent in the US are more confident than they were last year about growth and the global economy in the next three years. In assessing their own company’s growth prospects, 70 percent of European CEOs and 68 percent of Asia Pacific CEOs indicated they are more confident than a year ago. In the US, where the recovery is well underway, 19 percent are more confident than a year ago with another 46 percent expressing the same level of confidence about their prospects for growth. Most importantly, CEOs globally are set to hire, with 78 percent of respondents indicating they are expecting to be in hiring mode through mid-2018.
“The overall message we’ve heard from CEOs around the globe, is that they are positive about their prospects over the next three years, and importantly that they are looking to hire more people,” said John Veihmeyer, Global Chairman of KPMG International. “There is a more positive change in confidence versus the prior year, in Europe and Asia compared to the US, which is in part reflective of the US being in a more advanced stage of the economic recovery.”
KPMG Isle of Man’s .
Mike Fayle put these figures into a local context: “Whilst the Isle of Man is obviously a unique economic environment, our dependence on international markets obviously means that this degree of global optimism is good news for Manx businesses. The prospect of increased hiring is particularly interesting for us as a jurisdiction, as there is currently an on-going policy debate about labour law on the Island and whether or not we should be making it easier for skilled labour to come to our shores and work in Manx businesses.”
The Isle of Man Government has recently released details of a revised work permit regime that would relax certain rules, making employment marginally easier to arrange for off-Island workers in certain situations. However, there have been calls by some, including the Chamber of Commerce, to do more to bring more people to the Island and aim for higher population growth, to fuel the local economy.
“Some of the other results of the report suggest that our Island’s economic development strategy is on the right path,” Mike continued. In terms of issues having the greatest impact on their company’s prospects and performance, the top three issues identified by CEOs were ‘global economic growth,’ followed closely by the ‘regulatory environment,’ and ‘disruptive technology.’ He explained: “These are all familiar words to the Isle of Man. We have been pushing ourselves as well regulated and responsive jurisdiction for many years, and in recent years have also been pushing for recognition as a possible centre of excellence for disruptive technology. Together, these position the Isle of Man as a well-suited location for CEOs with an eye on global expansion, particularly those looking to move into European markets.”
The report may also indicate a tailing off of interest in the mergers and acquisitions market. Today, 52 percent of the CEOs say their current growth strategies are built primarily around organic growth, with 42 percent saying it is a combination of organic and inorganic growth through acquisitions and only six percent saying it’s primarily inorganic or acquisition based.
Mike did also sound a note of caution regarding the results: “Although the study was exceptionally robust, the results were collated prior to the recent market disruption due to concerns regarding Chinese growth, the fallout of which has been global in nature. We need to bear that in mind when using them in a strategic planning context.”
© 2017 KPMG LLC, an Isle of Man Limited Liability Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.