Australia’s CEOs optimistic about global economic outlook as 41% plan headcount increases and 88% adopt AI for business strategy: PwC’s 28th Annual Global CEO Survey

Tuesday, 21 January 2025

• 47% of Australia’s business leaders expect global growth to increase over the next 12 months, up from 37% last year.
• 41% of local CEOs expect to increase headcount over the next 12 months while 58% plan to make acquisitions in the next three years.
• Globally, CEOs are seeing tangible impacts from GenAI: 56% reported efficiency gains, while one-third saw profitability (34%) and revenue (32%) increases. Only a third say they personally have a high degree of trust in embedding the technology into key processes in their company.
• Nearly three in four (74%) of Australia’s CEOs believe their businesses will be economically viable in the next decade if it continues running on its current path, compared to 55% globally.
• Less than one in five CEOs locally (17%) report increased revenue as a result of climate related investments in contrast to the global benchmark of 33%.

AUSTRALIA – PwC’s 28th Annual Global CEO Survey – Australian Insights has found Australia’s business leaders are optimistic about the economic outlook, with 47% expecting global growth to increase over the next 12 months, up from 37% last year.

The report surveyed 4,701 CEOs across 109 countries and territories, including 116 from Australia. Of local CEOs surveyed, 41% expect to increase headcount over the next 12 months – almost double the proportion who expect headcount decreases (22%).

While CEOs are optimistic about the global economy, inflation remains a key threat, with almost a third (28%) of Australia’s surveyed CEOs feeling highly/extremely exposed to inflation in the next 12 months. The survey also reveals that while Australian CEOs have a higher degree of confidence in the future viability of their businesses, they are falling behind global peers when it comes to realising the benefits of converging megatrends such as technological disruption and climate change.

PwC Australia CEO Kevin Burrowes said these insights show that reinvention is no longer a choice but an imperative.

“Businesses in Australia are well and truly feeling the impacts of global disruptive forces. Disrupters such as AI and climate change have fundamentally changed the way we work, and those who responded early are starting to reap the rewards,” Mr Burrowes said.

“In Australia, the survey suggests some CEOs are taking bold steps to reinvent their business models, but many are yet to get started. While responding to these trends can be challenging, it’s important to take the leap now so businesses don’t miss the opportunity altogether.”

PwC’s Global Chairman Mohamed Kande said businesses around the world are transforming how companies compete and create value, emphasising the need for CEOs to move quickly.

“To thrive, business leaders must act now and take bold decisions around their strategy – ranging from people, footprint and supply chain, right through to reinventing their business model,” Mr Kande said.

Australia’s reinvention imperative

Compared to global peers, Australia’s CEOs remain less concerned about the long-term viability of their business. The survey found that nearly three in four (74%) local leaders are confident their business will survive the next decade, if it continues running on its current path, compared to 55% globally.

As global companies look to reinvent their business models, almost four in ten (38%) (locally 30%) say they have begun competing in at least one new sector in the last five years – with about one-third (34%) (locally 20%) noting this has represented over 20% of company revenue over this period.

However, the pace of reinvention is slow and a large majority of companies lack agility. When it comes to moving budget and people between projects and business units, around half of CEOs globally told us that they reallocate 10% or less of financial and human resources from year to year.

CEOs are optimistic about the potential of GenAI, but are looking for stronger results

Of the CEOs surveyed in Australia, a majority (88%) say AI adoption is important to achieving their company’s business strategy in the next three years. Globally, CEOs report seeing efficiency gains in their employees’ time over the last 12 months. Around one third told us GenAI adoption has delivered an increase in revenue (32%) and profitability (34%) in the past 12 months.

Those impacts are less significant among Australia’s business leaders, with 14% of CEO’s directly connecting GenAI to increased profitability, and just 10% to revenue increase. This difference may reflect a lower level of local AI adoption and earlier stage of maturity.

Across the board, trust in AI remains a hurdle to more widespread adoption. Only a third of all CEOs said they have a high degree of trust in embedding the technology into key processes in their company.

Unlocking the potential of climate-friendly investment

CEOs around the world are realising the gains from their investment in climate and sustainability, more than Australia’s business leaders. When asked about the financial impact of climate related investments over the last five years, the survey found that these moves were six times more likely to have resulted in increased revenue (33%) than decreased revenue (5%).

In addition, nearly two-thirds of global CEOs reported that climate related investments had either reduced costs or had no significant impact on costs. Yet, in Australia, less than one in five (17%) report increased revenue as a result of climate friendly investments, indicating Australia lags behind the global benchmark.

Challenges remain around initiating climate related investments: CEOs globally that made such investments cite regulatory complexity as the top factor (24%) inhibiting their companies’ ability to initiate those investments, as opposed to lower returns on investment (18%) or lack of buy-in from management or the board (6%).

Creating value in an era of disruption

In this report, we also outline ways leaders can cultivate value in this era of rapid change through quality decision making, re-thinking value creation and re-allocating resources. At the heart of this is the need to focus more on the quality and process of decision making, rather than fixating on an outcome. Businesses that actively counter confirmation bias and seek out alternative viewpoints are best placed to meet their potential.

“As CEOs consider success in 2025, taking bold steps to address and embrace technological disruption and climate change have proven to drive results around the world. What’s clear is that reinvention is no longer an option – it’s time to self-disrupt, or risk being disrupted,” Mr Burrowes said.