Executives bullish on growth, plan to seize opportunities from geopolitical uncertainty

KUCHING: Global middle market organisations, companies with annual revenues of US$1 million to US$ 3 billion, are showing no signs of slowing down in the face of geopolitical uncertainty.

Over one- third of middle market companies plan to grow six to 10 per cent this year, far outpacing the latest World Bank global GDP growth forecasts of 2.7 per cent, by more than three to seven per cent.

The findings released in the EY Growth Barometer, a survey of 2,340 middle market executives across 30 countries, reveal that in spite of geopolitical tensions, increasing populism, the rise of automation and artificial intelligence (AI) and skilled talent shortages, 89 per cent of executives see today’s uncertainty as grounds for growth opportunities.

What’s more, 14 per cent of all companies surveyed have current year growth ambitions of more than 16 per cent.

Annette Kimmitt, EY Global Growth Markets Leader, said the global economic backdrop is much stronger than what the prevailing narrative has been telling us.

“Despite geopolitical risks and uncertainties, businesses being disrupted through new technologies and globalisation rewriting the rules of supply and demand, middle market leaders are not only attuned to uncertainty, but are seizing it to grow, disrupt other markets and drive their growth agendas.”

Despite facing two years of Brexit negotiations, start-ups (companies under five years old) headquartered in the UK are displaying the highest levels of confidence of the countries surveyed.

UK start- ups are the most positive on current year growth ambitions with 26 per cent seeking to grow by 11-25 per cent and a further 23 per cent looking at year- on-year growth of more than 26 per cent.

But when looking at the largest markets, there are significant differences between the world’s largest economy, the US where slightly more than a third of all companies plan modest growth increases of under five per cent, compared to the world’s two tiger economies – China and India – where together 42 per cent of companies are targeting growth rates of six to 10 per cent.

Moreover, a quarter of companies in tiger economies have current year growth plans of 11 to 15 per cent.

Exe cut ive s ident i f ied technology and talent not only as the top two challenges facing the middle market C-suite today, but they are also seen as the tools by which they will overcome challenges and remain agile. Talent is cited as the top priority ahead of improved operations (21 per cent), cutting red tape (12 per cent) and beneficial agreements in a ranking of what is critical to meeting current growth ambitions.