by BERNAMA / pic credit: home.kpmg

A GLOBAL survey conducted by KPMG International Ltd has found that 59% of CEOs in the Asia Pacific (APAC) are now more confident about global economic recovery compared to earlier this year.

However, they are also increasingly concerned about the risk to their supply chains, according to the KPMG 2021 CEO Outlook, which surveyed over 1,300 global CEOs about their strategies and outlook over a three-year horizon.

Among almost 500 CEOs in the Asia Pacific, 66% of CEOs in APAC stated that their supply chains have been under increasing stress over the past 18 months.

It is thus not surprising that CEOs have ranked supply chain risk as their top threat to growth this year, the consultancy firm noted.

“Pre-pandemic, risks to the supply chain had been steadily gaining attention due to increasing volatility from trade tensions and climate-driven events but were still considered a low priority for CEOs.

“However, the pandemic brought this issue into sharper focus as organisations struggled to maintain supply chain continuity during worldwide lockdowns,” said the managing partner of KPMG in Malaysia Datuk Johan Idris in a statement.

KPMG said Asia Pacific CEOs continue to recognise the importance of building resilient, flexible supply chains, with 36% having stated an intention to monitor deeper into their supply chain to better anticipate potential problems, while 34% would diversify sources of input by adding new locations of inputs to make their supply chain more resilient.

Meanwhile, 14% said they would prioritise reconfiguring their supply chain to provide greater resiliency and more consistent access to achieve their growth objectives.

Other findings in the outlook stated that 70% of CEOs faced increased demands from stakeholders for more reporting and transparency on environmental, social, and governance (ESG) issues and 81% believed that the government’s stimulus would be required if all businesses are to reach net zero.

It also said while 68% of CEOs were placing more capital investment in buying new technology, they were also looking to build human capability with 49% planning to invest in digital training, development, and upskilling to ensure employees’ skills remain future-focused.

“Just 18% of CEOs now say they are planning to downsize, or have already downsized their organisation’s physical footprint. This is a dramatic shift from August 2020 where 75% stated their intention to downsize their space,” it said.

For more about the KPMG 2021 CEO Out look, please visit kpmg.com.my/CEOoutlook.