Nearly half of CEOs in Northern Ireland are anticipating a recession

Almost half of CEOs in Northern Ireland are anticipating a recession in the coming year, but most expect it to be mild and short, according to the eighth KPMG 2022 CEO Outlook.

Top of their list of priorities are advancing digitalisation, attracting and retaining talent and executing successful ESG (environmental, social and governance) strategies.

The report, representing the views of CEOs from some of the province’s largest and most influential companies with annual revenues over £460 million, found 44% of those questioned expect NI to fall into recession over the next year.

Despite the worrying results, it was a more optimistic outlook than the global survey where 86% of leaders anticipate a recession and less optimistic than the Republic where one third feel a recession is likely.

Were a recession to occur, just over half of NI CEOs expect it to be mild and short. Just over one third (36%) of NI leaders didn’t believe the province will fall into recession in the next 12 months when questioned.

Partner in charge of KPMG in NI Johnny Hanna, said: “At home and abroad CEOs have been tested by enormous challenges – a global pandemic, inflationary pressures and geopolitical tensions. Despite this NI leaders continue to show their usual resilience in the face of strong headwinds and are poised to tackle the challenges head on.”

In the short term, while most CEOs are confident in the resilience of their company (80%) and in their industry (84%) in the next six months, this confidence doesn’t extend to their country or the global economy where just 52% and 48% respectively are confident, revealed the report.

Longer-term, the survey revealed that the vast majority of NI leaders (96%) are confident or very confident about the growth prospects for the province over the next three years with 88% confident of growth in their own business.

However, leaders reported that headwinds to growth remain a challenge. Economic factors - such as rising interest rates, inflation and anticipated recession - as well as regulatory concerns, pandemic fatigue, and continued supply chain interruption were reported by NI’s CEOs as the most pressing organisational concerns today.

When it comes to the year ahead, advancing digitalisation and connectivity is the top objective for NI leaders in the next three years.

Unsurprisingly, the majority (80%) said they have aggressive digital investment strategies intended to secure first mover or fast-follower status, a similar result to their peer group in the Republic (76%) and globally (71%). However, recessionary concerns mean just over half (56%) of NI’s leaders have already paused their digital transformation strategy or plan to do so in the next six months.

Hybrid working has proven to have had a positive impact on hiring, according to two thirds (64%) of NI CEOs. The majority (72%) said it has helped with employee retention and 60% that is has boosted morale. When it comes to productivity, 44% said it has a positive impact and 36% a neutral impact.

ESG is now a key consideration and 44% of NI leaders said the programmes improve or significantly improve financial performance for their company, a jump from 32% last year.