EY CEO Outlook Pulse Survey: CEOs Remain Optimistic Amid Disruptions – A Surge in M&A Activity Expected

A recent EY CEO Outlook Pulse survey, which included 1,200 executives worldwide and introduced a new Global CEO Confidence Index, reveals that CEOs around the globe maintain a positive outlook on economic growth over the next 12 months. Nearly 69% of surveyed CEOs expressed optimism about the global economic landscape for the coming year.

This optimism persists despite CEOs facing numerous challenges in an unpredictable and volatile business environment shaped by rapid technological advancements, evolving consumer behaviors, and uncertain geopolitical conditions. The survey indicates that many CEOs find it difficult to keep up with the rapidly changing external environment. Fewer than 40% of the executives consider themselves ahead of the curve in handling external disruptions. Among the most confident CEOs, this figure rises to 54%, compared to just 8% for those who feel less assured.

The combination of positive CEO confidence and a realistic understanding of the external risks and opportunities is expected to boost mergers and acquisitions (M&A) activity in the year ahead. More than three-quarters (78%) of the most confident CEOs reported actively evaluating their portfolios in alignment with their core strategies to adapt to disruptive forces, and nearly all (98%) plan to undertake some form of transaction within the next 12 months. Overall, 37% of all CEOs plan to make an acquisition in the next year, with 59% of the most confident executives intending to buy assets, compared to only 16% of the less confident.

Andrea Guerzoni, EY’s Global Vice Chair for Strategy and Transactions, explained that today’s business leaders are acutely aware of both the opportunities and risks associated with the disruptive forces reshaping the commercial landscape. He suggested that a blend of pragmatic optimism and the fear of falling behind would likely drive investment and strategic activity in the coming months. He also noted that CEOs are expected to shift from a reactive stance to a more proactive approach to leverage these disruptive forces.

CEOs recognize that traditional portfolio review processes may no longer be effective in the current environment. Almost a quarter (24%) of respondents reported that their portfolio reviews were not aggressive enough, while 23% found the process too reactive. This realization is prompting CEOs to adopt a more flexible and proactive approach, with a focus on accelerating innovation and transformation to stay ahead of competitors.

In line with this trend, transactions are expected to remain stable in the coming months, driven by strategic alliances, joint ventures, and divestments. Nearly half (47%) of the CEOs plan to pursue strategic partnerships with third parties over the next year, while 44% are looking at divestments or IPOs, and 37% are prioritizing M&A activities.

Key investment destinations in the months ahead are expected to include the U.S., the UK, Canada, Mexico, and Germany. The sectors predicted to attract the most investment are banking, asset management, media and entertainment, consumer products, and insurance.

The survey also highlighted several disruptive issues at the forefront of CEO agendas that are expected to shape their actions over the next year. Among these are emerging technologies, which 38% of CEOs plan to use for innovation, new business models, and competitive advantage. Changing customer needs are seen as a priority by 36% of CEOs, while 35% are focused on the shifting global economic and geopolitical environment, changing regulations, and supply chain pressures.

Interestingly, less than a third (29%) of CEOs consider climate change and environmental issues to be among the most significant disruptive forces. Similarly, only 29% see access to talent as a major concern for the next year.

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