Three quarters (74%) of Irish CEOs expect economic growth to accelerate in the next 12 months, PwC's 2025 Irish CEO survey has found.

The study indicates a significant upswing in optimism among Irish business leaders from last year when 50% of respondents said they expected economic growth to improve and from 2022 when 16% said the same.

At the same time, 62% of Irish business leaders believe global economic growth will improve, up from 35% last year, and an overwhelming majority (93%) are confident about their company’s revenue prospects for the year ahead, up from 86% last year. 

Globally, 58% of CEOs expect the global economy to improve in the year ahead, up from 38% last year, and 91% of CEOs around the world are confident about their company’s future revenue prospects. 

Some 45% of CEOs expect to increase their headcount by 5% or more over the next 12 months, down from 53% last year but nearly four times the number that are planning to cut jobs (12%).

CEOs are conscious of risks, however, such as macro-economic volatility (93%), lower availability of workers (93%), and lower availability of workers with key skills (91%).

Other top risks include inflation (89%) -- although fewer are concerned about price increases than last year (95%) -- geopolitical conflict (88%), cyber threats (88%) and technology disruption (87%).

Six in 10 (62%) Irish business leaders are concerned about social inequality, up from 47% a year ago. Some 4,701 CEOs, including 82 in Ireland, answered the survey in late 2024.

“Despite operating in an uncertain environment, Irish CEOs are more optimistic than their global counterparts and than they were a year ago. This optimism is also reflected in strong revenue growth expectations for their own businesses, indicating we may expect continued capital investment," said Enda McDonagh, managing partner of PwC Ireland.

"The trends in this year’s report paint a complex picture, and in the months since the survey was conducted, we have seen further shifts in the business environment.  Business leaders are navigating a landscape where optimism and caution coexist.

"This report offers key perspectives and insights on how businesses can re-invent how they create, deliver and capture value, along with the risks inherent in not doing so at pace.” 

The survey found that three in 10 (29%) Irish CEOs believe that their company will not be viable in a decade if it continues on its current path, up from 21% two years ago and compared to 42% globally.

As a result, 84% of Irish business leaders have taken at least one significant action such as developing innovative new products/services, targeting a new customer base or implementing new pricing models in the past five years to change how they create value.

However, the survey suggests that the pace of reinvention needs to quicken as less than a third (32%) of Irish business leaders say that they have begun competing in at least one new sector or industry in the last five years.

When it comes to moving resources between projects, over half (54%) of Irish CEOs said they had reallocated just 10% or less of financial and human resources in the last year, highlighting a lack of dynamic resource allocation, a cornerstone of strategic reinvention.

“While we see Irish businesses focused on taking action to remain viable in ten years time, the pace of reinvention needs to speed up. Innovation is the lifeblood of growth. By focusing on new products and customer groups, Irish businesses can set themselves up for future success," said Amy Ball, transformation leader at PwC Ireland.

The study also suggests an expected surge in AI-related innovation activity although there are mixed views on tangible benefits to date, and there is a focus on using AI for operational efficiencies rather than fundamental business model transformation.

Over four out of ten (44%) reported seeing efficiency gains in their employees’ time at work over the last 12 months, down from 69% last year, while less than a third (31%) saw revenue increases, and only 24% saw profit increases, but half (50%) of Irish CEOs expect AI to boost profitability in the next 12 months.

On average, 89% of Irish CEOs predict that AI will be systematically integrated into a range of key business areas in their organisation over the next three year in areas such as technology platforms (94%), business processes and workflows (94%) and new product development (84%).

Some 87% of Irish CEOs said that they experienced an increase or no net change in headcount in the last 12 months as a result of generative AI, up from 73% last year.

In terms of ESG, three-quarters (76%) of Irish CEOs are concerned about risks from climate change, down from 96% in 2022.

Nearly a third (31%) of Irish survey participants reported that climate change investments in their company resulted in increased revenues in the last five years, with just 3% saying it had reduced revenues. One in ten saw costs reduce, albeit over half (51%) said that it had increased costs.

Some 30% of Irish CEOs have accepted a lower rate of return for climate-friendly investments in the last 12 months compared to other investments. and 40% confirmed that a proportion of their personal incentive compensation is determined by sustainability metrics

The data suggests that the more CEO compensation is linked to sustainability, the more revenue is likely to come from climate-friendly investments, but 29% of Irish business leaders admitted to not having made climate-friendly investments in the last year.

“Climate action is more than a strategic business decision; it’s a moral and social imperative essential for the longevity of our planet," said David McGee, ESG leader at PwC Ireland.

"As stewards of their organisations, CEOs have a responsibility to lead the charge in adopting sustainable practices. However, they must also ensure that the long-term benefits align with the company’s financial goals.

"We are seeing Irish organisations embrace reinvention - with significant actions to embed AI and climate actions into the DNA of their businesses.  However, there is more work to do. We need a change of mindset to link these actions to innovative growth strategies and bottom-line improvements."

(Pic: Getty Images)