SINGAPORE - Chief executives in Singapore are more bullish about the country's growth potential and their companies' earning power over the next three years compared with their global peers, according to a survey released on Wednesday (Sept 1).
It also found that CEOs here have been "aggressively" scaling their operations through mergers and acquisitions (M&A), but they face pressure from emerging climate change and global tax issues.
Many are struggling "to tell the ESG (environment, social and governance) story convincingly for their organisations", noted the survey by professional services firm KPMG.
The survey - it polled 1,325 CEOs from 11 sectors worldwide between Jun 29 and Aug 6 - found that 92 per cent of Singapore respondents were confident of growth compared with 80 per cent a year ago.
Mr Ong Pang Thye, managing partner of KPMG in Singapore, said the positive sentiment should continue for the rest of the year now that 80 per cent of the local population has been vaccinated.
He added that business challenges related to material shortages and supply chain disruptions may start to ease as borders open up.
Almost all the Singapore bosses predicted that their company's earnings will increase in the next three years. In contrast, none felt their company's earnings would grow by more than 5 per cent last year.
Most also expected more jobs to be created over the next three years.
Mr Ong said: "Most of the corporate constraints are on the talent front. With borders opening, firms can start bringing back talent, which will boost growth."
Around 25 per cent of CEOs from the consumer and retail, energy, insurance, manufacturing and telecommunications sectors expect an increase in headcount by 6 per cent to 10 per cent.
Local infrastructure sector CEOs were the most optimistic, projecting a rise in organisational headcount by 11 per cent to 25 per cent.
Almost a quarter of the Singapore CEOs said talent recruitment and retention will be a top priority while about 30 per cent plan to expand through M&As, saying this is "the most important strategy" for growth.
In fact, the appetite for M&As has surged to a three-year high this year, with 92 per cent of respondents saying they will make acquisitions that will impact their organisations in the next three years.
The climate agenda has grown in importance for corporate leaders worldwide, but this is particularly pronounced in Singapore, with 80 per cent of local CEOs saying there is significant demand from stakeholders for increasing reporting and transparency on ESG issues.
More than 90 per cent expect to be held personally responsible for driving progress in addressing social issues, higher than the global average. About 80 per cent said their annual bonus is tied significantly to ESG performance, while 40 per cent said ESG is linked to their base salary and long-term incentive plans.
Yet, bosses said they struggle to articulate their ESG goals and find it difficult to raise reporting standards in this area to match those in financial reporting.
In fact, more than half the Singapore CEOs said ESG programmes have reduced their financial performance.