Majority of CEOs believe economy will be stronger this year

A large majority of Australian chief executives have expressed faith that the economy will be stronger this year.

A large majority of Australian chief executives have expressed faith that the economy will be stronger this year, with a near consensus emerging that cyber attacks pose the greatest risk to growing their businesses, a survey from PwC has revealed.

The accounting firm’s 24th annual global CEO survey, which this year polled more than 5000 chief executives in 100 countries and territories over January and February, also showed most Australian CEOs expected to take on more staff over the next three years.

Confidence in the economy has risen sharply from a year earlier, from only 11 per cent expecting an improvement when asked in early 2020, to 70 per cent now.

Seven in 10 said they expected profits to rise this year, and 88 per cent predicted an increase in revenue growth. Over the longer term, more than nine in 10 Australian CEOs expressed confidence in the coming three years.

PwC Australia CEO Tom Seymour said it wasn’t surprising to see the surge in optimism after the uncertainty and pain of last year. “Australia has weathered the COVID-19 pandemic well compared to other parts of the world,” he said.

National accounts figures ­released last week showed the economy grew by more than 3 per cent in the December quarter, only slightly more slowly than the blockbuster pace over the three months to September.

The PwC survey results echoed NAB’s latest monthly business confidence gauge, which showed corporate sentiment and conditions at multi-year highs.

The pandemic and associated health restrictions have accelerated the digitisation of the Australian economy, as households, workers and firms have been forced to conduct more of their business online.

This global trend has coincided with a sharp rise in worries around cyber security. The PwC survey showed 95 per cent of Australian CEOs identified cyber risks as the top threat to their businesses, up from 86 per cent last year. “Cyber attacks are on the rise in Australia and the events of last year have demonstrated the importance of being prepared,” Mr Seymour said.

As a result of the pandemic, the survey showed Australian CEOs were updating their technology plans, flagging that they plan to increase investments over the next three years in digital transformation (79 per cent), and cyber security and data privacy (78 per cent).

Other threats Australian CEOs identified included speed of technological change and availability of key skills (53 per cent of respondents), and climate change and environmental damage (49 per cent).