KPMG "2023 Global Manufacturing Outlook"

KPMG Releases "2023 Global Manufacturing Expectations" Report According to findings from KPMG's research covering 11 countries, manufacturing sector CEOs continue to trust their ability to achieve profitable growth over the next three years, but most expect to face economic contraction throughout 2023. KPMG conducted a survey with CEOs of 182 major manufacturing companies across 11 countries in Europe, Asia and North America. The survey, designed to understand how CEOs will sustain growth amid global turbulence, resulted in the "2023 Global Manufacturing Expectations" report, which reveals continued pressure on supply chains, emerging industrial transformation trends, ESG (environmental, social, governance) objectives and talent requirements. According to the report, CEOs continue to trust their ability to achieve profitable growth over the next three years at levels consistent with the previous survey, but most expect to face economic contraction throughout 2023. To reach their growth targets, it becomes increasingly important for CEOs to balance their investments between short and long term, technology and people, and internal and external initiatives. Commenting on the report, KPMG Turkey Industrial Manufacturing Sector Leader Murat Palaoğlu stated: "As we pass through a period of slowing global economic growth, this will also affect the profits and sales of manufacturing companies. For this reason, it is important for CEOs to chart a roadmap to sustain their growth. With our report, we aimed to provide important information that will help CEOs manage their journey during these difficult times. Companies can benefit from the findings in our report to benchmark themselves against peers and take advantage of the recommendations in our report when charting roadmaps appropriate to their strategies," he said. [caption id="attachment_150398" align="aligncenter"] Murat Palaoğlu[/caption]

Strong optimism persists despite challenges

According to KPMG's report, despite global economic slowdown and the numerous challenges facing manufacturers, CEOs in the manufacturing sector remain confident about their companies' growth expectations over the next three years. This confidence level has barely changed over the past 12 months. CEOs are also significantly more optimistic about their sectors' growth between today and 2025 compared to previous surveys. However, at a time when governments are trying to reduce inflation by dampening demand, CEOs have less confidence in the world's near-term economic growth. Therefore, despite optimism regarding the long term, more than three-quarters of participants acknowledge that in the event of economic contraction, this could affect their companies' three-year growth expectations. CEOs are also planning for the possibility of economic contraction, which could mean making difficult decisions to strengthen their companies in the face of slowdown. 86 percent of participants plan to focus on increasing productivity or are already doing so. However, CEOs are confident that their companies will remain resilient over the next six months.

Global supply chains are changing

The economic picture is highly uncertain, not only due to measures governments have taken to reduce inflation, but also due to rising geopolitical risks worldwide. New global tensions resulting from the war in Ukraine have caused companies to reconsider their international strategies. 88 percent of companies suspended their operations in Russia in response to the war in Ukraine. As 84 percent of CEOs shift their operations to neighboring countries or their own countries, they are also diversifying their supply chains to reduce vulnerabilities that emerged during the pandemic. While the logic of investing near major markets remains strong, geopolitical uncertainty increases the likelihood of a fragmented global economy.