After a significant uptick in optimism last year, Middle East CEOs are more cautious about growth in the region. That is according to the Middle East CEOs participating in PwC’s 22nd CEO Survey, launched at the World Economic Forum Annual Meeting in Davos.
Only 28 percent of our CEOs were ‘very confident’ on revenue growth over the next 12 months compared to 33 percent last year, and 35 percent of global CEOs. When we look at medium-term growth for our CEOs, 40 percent are ‘very confident’ about their revenue prospects over the next three years, a record low we maintained in this years survey.
Middle East CEOs are also more pessimistic about the short-term global economic outlook for 2019 than their global peer (28 percent vs 42 percent). Middle East CEOs, in line with their global peers, are prioritising operational efficiencies to remain fit for growth. 68 percent of regional CEOs put “operational efficiencies” at the top of their list of planned activities to drive profitability in the next 12 months compared with 77 percent globally.
Most strikingly, the proportion of business leaders who expect their headcount to fall is more than double the global figure (43 percent vs 19 percent).
Stephen Anderson, Clients and Markets Leader at PwC Middle East, said: “Some of the crude cost-cutting in the region in 2015-2017 had cut into muscle, and with improving economic conditions last year, some pressure came off.
‘‘We are now seeing a far more strategic, fundamental look at efficiency within businesses, where they are looking to leverage technology to sustain a lower cost base.”
CEOs are looking closer to home for growth. Egypt featured more prominently this year as 15 percent of CEOs cited it as the most important for growth, coming second only to Saudi Arabia (28 percent) and followed by India (13 percent) and Iraq (10 percent) in the rankings.
Regional CEOs are grappling with rapidly changing consumer behaviour as the digital revolution takes hold at speed. Middle East CEOs see changing consumer behaviours (79 percent) and the speed of technological change (75 percent) as the most significant threats to their organisation.
On the impact of AI, 91 percent of Middle East CEOs believe that artificial intelligence (AI) will significantly change how they do business in the next five years, in line with the global results.
Two things are holding regional organisations back according to CEOs, data and skills. Only 13 percent (compared to 41 percent amongst global CEOs) believe the quality of their company’s data is adequate for assessing the customers’ preferences and needs. And 61 percent of regional CEOs cited the lack of analytical talent as the primary reason they do not receive adequate information.
Hani Ashkar, Middle East Senior Partner comments: “The skills needed to give meaning to data and technology are in high demand. In order to reap the benefits of an investment in digital, companies need to invest and upskill their people. This is important because digital upskilling goes beyond just embedding the technology, it will allow companies to deliver quality and drive growth, securing their future.”
Source from: The Peninsula