Good morning.
What’s in store for business in 2024? A new survey of big company CEOs and professional investors, out this morning from the folks at Teneo, provides some interesting clues. CEO Daily got an exclusive early look. A few takeaways:
—CEOs and investors are split on the macroeconomy. 53% of CEOs expect economic conditions to worsen. 94% of investors expect improvement. My guess is the latter group is betting on a reduction in interest rates next year. We will see.
—78% of CEOs say they are investing in AI. That’s up 20 points from last year. But 1 in 4 do not believe they have the right people in place to power their AI program. That suggests a continuing battle for talent.
—Deglobalization will continue. 80% of CEOs say they will continue to retool to improve supply chain resiliency and reduce geopolitically-sensitive dependencies. But interestingly, 55% of CEOs and 63% of investors report that China is important to their strategies over the next decade—up sharply from just 18% and 34% last year. Decoupling has its limits.
—M&A activity will rise. 68% of CEOs and investors expect a sizable M&A uptick in 2024, despite higher interest rates and a tougher regulatory environment.
—ESG will continue. Only 8% of CEOs say they are ramping down their ESG programs, while 92% say they will stay the course. But 72% say they have modified their approach, and are talking about it less (45%), listening more closely to stakeholders to decide when and where to engage (28%), and being more cautious in determining which topics to engage in (28%).
—Domestic politics is a big business story. The U.S.-based CEOs all reported some adjustment to their business plans based on the 2024 election, but their reactions varied. 20% said they were increasing investment in social and environmental causes, while 24% said they were decreasing such investment. 35% said they were increasing domestic investment as a result of the election, while the same percentage said they were decreasing domestic investment.
“With key elections around the world next year, including the U.S. presidential election,” Teneo CEO Paul Keary told me, “it is not surprising that CEOs see domestic political disruption as the top risk facing companies heading into 2024.”
The survey included 111 CEOs from global publicly-traded companies and 152 investors. More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
