Fifty-three percent of CEOs in the region are very confident about prospects for business and economic growth over the next 12 months, according to a PwC survey.
The depth of confidence sets Middle East CEOs apart from any other region in the world (36 percent). This relative optimism is expressed both in terms of confidence about their companies’ growth and the outlook for wider economic growth.
In conjunction with the World Economic Forum on the Middle East and North Africa 2013, PwC Middle East has revealed the results of the 2013 Middle East CEO Survey titled "Matching confidence with competitiveness."
In common with the global trend, confidence among CEOs in the region is down compared to last year’s survey (60 percent).
Commenting on the findings, Hani Ashkar, Middle East deals leader at PwC, said: "The high confidence percentage of Middle East CEOs led to a positive outlook for the economy. Compared to their global counterparts, Middle East CEOs are expecting a major employment headcount increase with over two thirds expecting a 5 percent or more rise."
Domestic markets present a more open and competitive environment now than in the past. Forty-four percent of Middle East CEOs see organic domestic growth as a primary driver in 2013. Alternatively, 25 percent view growth stemming from new operations in foreign markets and 13 percent from new mergers and acquisitions (M&A), joint ventures or strategic alliances.
Many Middle East CEOs are positioning their companies to take advantage of emerging market opportunities that exists in Africa and Asia. A quarter of the Middle East CEOs appear to have their sights set on this ‘south-south’ opportunity as their main route to growth in the period ahead.
Thirty-eight percent of Middle East CEOs count M&A and strategic alliances, among the top investment priorities for their companies in the upcoming 12 months. A massive 73 percent target those M&A’s and alliances in their own region, followed by 36 percent for Africa, 27 percent for South-East Asia, and 27 percent for Western Europe.
Forty-one percent of Middle East CEOs say that the risk of disruption arising from social unrest tops the lists of their concerns. Based on the survey findings other Middle East CEOs believe that other concerns could pose risk to their business; the two other concerns that stood out are over-regulation (75 percent) and the shortage of a skilled workforces (69 percent).
Identifying operation transformation ranks number one on the list of investment priorities for Middle East CEOs, through balancing efficiency with agility.
Commenting on this finding Warwick Hunt, PwC Middle East senior partner, said: "Middle East CEOs are acknowledging the challenges present and are adding a stronger emphasis on strengthening their companies’ operational effectiveness, including investing in roll out of new technologies and addressing talent gaps. According to our findings CEOs today have clearly learned from their experiences, where 25 percent of the Middle East CEOs plan in the coming 12 months to have direct control of activities by in-sourcing business processes, which would ultimately give them greater resilience in the event of disruption."
Seventy-five percent of Middle East CEOs expressed intent to boost headcount in the coming year, where only 6 percent anticipate job reductions, as opposed to 23 percent globally.
With the continuing focus utilizing home-grown skills, 81 percent of CEOs in the region are planning investments to grow their home market. At the same time, they don’t expect to do it alone, 53 percent said a skilled workforce should be a top government priority.
Eighty-eight percent of Middle East CEOs anticipate making changes in the next 12 months related to customer growth loyalty strategies and talent management. In addition, 81 percent recognize the need for change in their technology investments.
Ninety percent of respondents are seeking to strengthen their engagement programs with customers and clients, 84 percent with stakeholders using social media and 83 percent with the media.