Institutional investors have a positive outlook for the economy, CEOs are not convinced

With mixed data from major economies and the continued risks from geopolitical issues, there is little consensus about the outlook for 2024.

This is clear among business leaders and portfolio managers at institutions managing a combined $3.4 trillion of company and portfolio value, who reveal differing views of what’s ahead in a survey by global CEO advisory firm Teneo.

While investors are almost unanimous in their upbeat view of the economic climate, with 94% expecting improvement in the first half of 2024, more than half (53%) of CEOs are bracing for things to get worse.

Geopolitics is in the minds of both groups of respondents, who are considering the strategic importance of China, among other matters. There is concern about how the U.S. presidential election will impact business with every U.S. based CEO respondent making some type of change to business strategy in anticipation of the outcome.

Despite some key differences, investors and business leaders agree on some matters such as AI. Both groups (80% of all respondents) are making investments in the technology a priority. However, investors think CEOs may be underestimating how AI may disrupt their workforces.

M&A OUTLOOK

Mergers and acquisitions are another area of broad agreement with 68% of both CEOs and investors expect a sizable M&A uptick in 2024 – following one of the worst years in 2023 - despite tougher regulatory oversight and higher cost of capital.

"CEOs and institutional investors continue to navigate an incredibly volatile and fast-changing operating environment around the world," said Paul Keary, CEO of Teneo. "Every business leader has reason for concern about the year ahead, yet there is a clear desire to stop simply reacting and to start seizing opportunities, as evidenced by strong predictions for a recovery in M&A in 2024."