Middle East CEOs have been quick to take up future-proofing measures to counter any slowdown the regional economies might experience this year, says PwC. Image Credit: Shutterstock

Dubai: It could be that CEOs in the Gulf and Middle East are seeing signs that a global recession is less likely – or the intensity if it happens might not run too deep to hurt their prospects.

Whatever be the case, these CEOs are quite optimistic about the Middle East’s economic prospects for 2023, according to a survey by the consultancy PwC, with two-thirds of business leaders polled sharing the sentiment. Yet, they still are not quite that optimistic the global economy would be heading into growth, with 73 per cent of global CEOs and 82 per cent of regional CEOs expecting a decline in these next 12 months. In fact, “Just 21 per cent of North American CEOs and 18 per cent of European CEOs are confident in revenue growth in their own markets,” the PwC report finds.

That is in marked contrast to the vibes shared by this region’s executives, ‘where 63 per cent are confident about their own companies’ revenue growth, with 71 per cent confident about their outlook for the next three years’.

The news coming out of the US is indeed setting off alarms, especially for anyone in and connected with the tech industry. Layoffs are becoming a constant, and the concern is more sectors could see it happening to some degree.

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In recent months, UAE and Gulf businesses have been taking precautions against being over-exposed to a global downturn, and cash management is the order of the day. Where possible, they are trimming their debt loads.

"Our survey outlines key takeaways on how CEOs in the region are moving ahead to future-proof their companies and stay ahead of longer-term challenges,” said Hani Ashkar, PwC Middle East Senior Partner. But “Today, macroeconomic volatility and geopolitical tensions are undoubtedly impacting the confidence of global CEOs' outlook.”

The Middle East CEOs’ gameplan

Long-term viability

In the Middle East, CEOs are ‘accelerating M&A activity with 76 per cent not delaying deals vs 60 per cent globally’. And there is now slowing down on investments, with 58 per cent of regional CEOs ‘continuing to invest vs just 40% globally’.

Investing in digitalisation

Four in five regional CEOs expect to invest in automation processes this year, with 66 per cent planning to deploy cloud technology, AI, and other advanced technologies. Attracting/retaining talent remains a focus are, with 74 per cent of CEOs expecting to invest in reskilling their workforces.

And, this is vital, 84 per cent of regional leaders plan on ‘not reducing staff compensation’.

Taking action on climate risk

A ‘new sustainability mindset’ has resulted in nearly 50 per cent of Middle East CEOs taking steps to mitigate climate risk or coming up new products and processes to lower carbon footprint.

“This year’s Middle East CEO survey demonstrates that regional business leaders are balancing confident growth prospects along with the challenges of transforming their business to ensure resilience in the face of global volatility and concerns about long-term viability,” said Stephen Anderson, Middle East Strategy and Markets Leader.

“CEOs are turbocharging on 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.”