The majority of CEOs are ready to accelerate plans for investment and mergers and acquisitions (M&A) in their pursuit for growth, according to the inaugural EY 2022 CEO Outlook Survey, which recorded the views of more than 2,000 CEOs across the globe.
More than half of respondents (54%) will prioritise investment in existing businesses, digital transformation and sustainability, according to the survey. In addition, more than three-quarters (79%) of respondents have adjusted, or are planning to adjust, their supply chain to help reduce costs and minimise risks to prepare for future disruption.
Following a record year that saw $5 trillion worth of M&A, transactions will remain a critical tool for CEOs in 2022, complementing other areas of investment. Nearly two-thirds (59%) of respondents expect their companies to pursue acquisitions in the next 12 months – up from 48% at the start of 2021.
CEO investment plans, however, could be thrown off course due to external risks to their business. A majority of the surveyed CEOs (87%) appear worried about rising input prices and identify trade tensions (18%), the impact of climate change (17%) and increasing competition from challengers (13%) as the most critical risks to the future growth of their businesses.
Andrea Guerzoni, EY Global vice-chair – strategy and transactions, said: “CEOs are ready to be on the front foot when it comes to investment. At the same time, the impact of the fragile global environment and the increasing cost of doing business across the board, from rising inflation to rocketing energy costs, is keeping them up at night. Deals will remain a key lever in CEOs’ investment toolkit.”
The US, the UK, China, India and Germany are the most favoured destinations for those CEOs looking to pursue an acquisition in 2022. Looking at sectors, technology, healthcare and advanced manufacturing are the top three sectors more likely to buy assets.
Ronald Attard, EY Malta country managing partner, said: “A dominating trend across the international business landscape is ESG and sustainability. The survey shines a light on the concerns which are becoming even more evident for dealmakers.
“An overwhelming 99% of responding CEOs say they factor these issues into their buying strategies, while 6% of respondents say they have walked away from deals in the past year, due to ESG-related concerns about the target. Maltese CEOs will certainly be looking at these shifts and many are already planning for a more sustainable future.”