Local Leaders are Adapting to a Complex World: KPMG CEO Outlook Highlights

Local leaders are adapting to a complex world: KPMG CEO Outlook highlights strategic shifts

Highlights:

• CEO confidence in the global economy has dropped to 68 percent – its lowest level since 2021, however the majority express confidence in their own company’s growth potential
• Despite ongoing economic pressures, 92 percent of leaders are planning to increase headcount over the next 12 months.
• AI remains a top investment priority, with 69 percent of CEOs planning to allocate 10–20 percent of their budgets to AI over the next 12 months.
• 70 percent of CEOs are concerned about competition for AI talent, and 77 percent highlighting workforce upskilling as a challenge
• 61 percent of CEOs now express confidence that they can meet their net-zero goals by 2030, a significant increase from 51 percent in 2024.

CEO confidence in the global economy has hit a five-year low, according to the KPMG 2025 Global CEO Outlook, as corporate leaders focus strategic investments in AI, talent and risk resilience to sustain and fuel future growth.

The annual survey of more than 1,300 global leaders reveals a cautious outlook among CEOs, driven by persistent geopolitical tensions and economic uncertainty.

The report finds that 68 percent of CEOs are confident in the current trajectory of the world economy – down from 72 percent last year and continuing a long-term trend of declining confidence. A majority of CEOs – 79% – express confidence in their company’s growth prospects for the next three years, while 82% report similar optimism regarding the outlook for their industry over the same period.

“The challenging landscape is prompting a shift in leadership approach, with many of our local business leaders adapting their growth strategies to navigate today’s complex world,” said Dermot Dempsey, Territory Lead Partner, KPMG in the Crown Dependencies.

Despite the headwinds, cautious optimism persists, with a significant majority of leaders focusing on investment in talent to drive a return to growth. 92 percent of CEOs say they’re planning to increase headcount over the next 12 months, while many remain upbeat on healthy earnings growth and remain keen on M&A. 40 percent forecast earnings increases of more than 2.5 percent in the coming twelve months, while 89 percent are predicting merger or acquisition activity.

Their biggest potential roadblocks to achieving growth remain relatively unchanged from last year, with cybercrime and cyber insecurity (79 percent), AI workforce readiness or upskilling of workforce on AI (77%) and success integration of AI into business processes (75 percent) continuing to loom large.

Economic and geopolitical turbulence is forcing CEOs to rethink their leadership and strategy. Most (72 percent) have already adapted their growth plans, but leaders remain divided on what specific capabilities are needed to respond to today’s fast-changing and unpredictable environment, with greater agility and faster decision making (26 percent) vying with transparency in communication (24 percent) and the ability to identify prioritise risks and manage risks (23 percent) for top priority.

CEOs, navigating a shifting economic landscape, are doubling down on AI and technological innovation. Nearly three quarters (71percent) of leaders say AI is a top investment priority for 2026, with 69 percent planning to invest between 10 and 20 percent of their budgets to AI over the next 12 months.

“Locally, AI adoption presents a significant opportunity for businesses in our islands whilst also creating new challenges for the boardroom. Ethical considerations, a lack of regulation and governance frameworks, and data readiness all need careful attention,” commented Mr. Dempsey.

CEOs globally are prioritising AI investment, but success hinges on effective, people-led implementation. While concerns about job displacement remain, 61% are actively hiring for AI and tech skills. Talent competition is intensifying, with 70% worried about attracting AI expertise and 77% citing upskilling as a major challenge — a pressure felt acutely in island jurisdictions.

Confidence in meeting net-zero targets by 2030 has risen to 61%, up from 51% last year. This signals growing belief in the feasibility of long-term climate goals, with Crown Dependencies leaders increasingly aligning with local sustainability efforts.

“The findings show that CEOs are leveraging disruption by investing in technology, innovation, and talent. Leaders recognise the need to embrace innovation while addressing challenges over upskilling and talent access which are sometimes more acute in our islands. Whilst the macro economic environment remains challenging, those leaders who navigate market volatility and invest strategically will unlock new opportunities and achieve sustainable growth,” concluded Mr Dempsey.