Despite ongoing geopolitical and macroeconomic challenges, global CEOs are more confident that business will grow this year. However, Singapore’s business leaders have expressed a significant dip in optimism, according to the latest Ernst & Young (EY)-Parthenon CEO Outlook Survey: Global Confidence Index. The survey, which evaluates CEO sentiment based on 15 key confidence measures, polled 1,200 global CEOs, including 40 from Singapore.
Global versus Singapore CEO confidence
While overall global CEO confidence rose from 70.5% in September 2024 to 73.5%, Singapore’s CEO confidence level fell sharply from 72% to 54%. This decline is largely attributed to concerns over prices and inflation, which continue to weigh on business sentiment.
Critically, 49% of global CEO respondents believe these worries will further escalate in 2025.
Janet Truncale, EY global chair and CEO, says: “Adaptability is the ultimate advantage in today’s landscape. Organisations that embrace transformation can turn disruption into opportunity, continuously learning, pivoting and growing to shape their future with confidence.”
“Global cost of operations remains high and this is exacerbated by the ongoing global geopolitical and macroeconomic uncertainty, which continues to weigh on the minds of Singapore’s corporate leaders,” says Andre Toh, EY Asean and Asia-Pacific (APAC) valuation, modeling and economics leader.
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“Further, as an open economy, Singapore is vulnerable to supply chain shocks and trade disruptions, which have been escalating in recent months.
“Until the dust settles and greater certainty returns to the business landscape, Singapore’s corporate leaders can be expected to be more cautious with their decision-making,” he adds.
Despite this, optimism remains in certain areas. More than half of CEOs in Singapore, or 56%, and globally, at 57%, are confident in their ability to successfully transform their business models for the future.
Meanwhile, a vast majority of CEOs, 85% in Singapore and globally, believe that addressing capability gaps and striking the right balance between human talent and technology will be critical for success in 2025.
However, concerns over profitability persist, with 55% of Singapore CEOs warning that declining margins could lead to workforce reductions.
Confidence levels also influence business priorities. The most confident CEOs globally are prioritising employee and customer experience transformation over top-line growth and margin expansion.
In contrast, the least confident CEOs focus more on financial performance, with 40% emphasizing revenue growth and profitability compared to just 20% of their highly confident peers.
While the appetite for mergers and acquisitions (M&A) remains steady among global CEOs, rising from 37% in September 2024 to 56%, Singapore CEOs are becoming more cautious. The proportion of local CEOs planning M&A activity has dropped from 48% to 40%.
Despite this, 98% of Singapore CEOs still intend to pursue some form of transaction initiative over the next 12 months, whether through M&A, divestments, spin-offs, IPOs, or strategic alliances.
When evaluating acquisitions, Singapore CEOs prioritise enhanced customer engagement and retention, operational improvements, and product and process innovation. Globally, these figures stand at 29%, 26%, and 33%, respectively.
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Interestingly, expectations for megadeals are on the rise, with 67% of Singapore CEOs compared to 60% globally anticipating an increase in deals worth more than US$10 billion ($13.3 billion).
Sriram Changali, EY Asean value creation leader, says: “Digital and business transformation remains a critical driver of deal strategies, and artificial intelligence capabilities are increasingly driving corporate acquisition strategies as companies seek to build operational and competitive resilience, and create value for customers and stakeholders.
“Talent constraints continue to put pressure on Singapore executives, while cost synergies become more compelling in challenging economic environments,” he adds.
Singapore CEOs are also showing a growing interest in divestments and carve-outs, with 60% planning such moves, up from 40% in September 2024. This figure surpasses the global average of 48%, which saw a more modest increase from 44%.
Additionally, Singapore’s business leaders are looking closer to home when planning capital investments. Singapore itself remains the top investment destination for local CEOs, followed by the US, Malaysia, Indonesia, and Hong Kong. Globally, CEOs are focusing on the US, Canada, Germany, Mexico, and the UK as their key investment markets.
“As Singapore’s corporate leaders are adapting to a new normal of complex change, Asia continues to stand out as a region primed for growth. As they seek to invest and transform their business with deals as a key catalyst, the most confident CEOs will mitigate disruption, drive sustainable growth and enhance value for stakeholders,” concludes Changali.
