Nearly two thirds of UK chief executives have seen their supply chains come under strain during the pandemic, while bosses globally now fear supply disruption as one of the biggest risks to growth, a survey has revealed.
A worldwide survey of chief executives by KPMG found supply chain risk is one of the three biggest business challenges, alongside cyber security and environmental and climate issues.
It showed that bosses in sectors that produce goods – such as consumer and retail, manufacturing and automotive – consider supply chain problems as their main threat to growth.
The findings come amid a mounting supply chain crisis in the UK, caused by a lorry driver shortage, the pandemic and Brexit.
The problems are leaving supermarket shelves increasingly bare and impacting sectors from retail and restaurants to house building and DIY.
The KPMG 2021 CEO Outlook showed 56% of chief executives globally – including 59% in the UK – say their business supply chain has been under increased stress since the start of the Covid-19 crisis.
Nearly a fifth of bosses worldwide (19%) are planning to mitigate the impact by “onshoring” more of their supply chain, with 16% of UK business leaders saying they would be boosting British supply over the next three years.
Almost one in three (30%) of global chief executives and 26% of UK bosses said they would be diversifying sources of input, by adding new locations to make their supply chains more resilient.
The poll of more than 1,300 global chief executives – including 150 in the UK – also highlighted the shift towards growth as the global economy bounces back from the pandemic.
In total 87% say they are ready to make an acquisition in the next three years.
And those planning to cut their organisation’s physical footprint has dropped dramatically from 69% last August to 21% worldwide in the latest survey – and even lower in the UK, at 14%.
Jon Holt, chief executive of KPMG in the UK, said: “After a difficult 18 months, it’s encouraging to see CEOs in the UK and globally thinking about growth and investment for the future with renewed confidence and optimism.
“CEOs have had to pivot their business strategies to face into many uncertainties brought by the pandemic, and now they are looking to move their plans from resilience to expansion as the economy bounces back.”
The survey highlighted the changes to work culture due to the pandemic, with 37% putting in place a hybrid model where staff can typically work remotely for two or three days a week.
More than half – 51% – are also investing in shared office space, up from 14% in the January/February survey.
Another key area flagged in the study is the growing importance of environmental issues, with 35% of UK bosses planning to invest more than 10% of their revenues towards sustainability measures and programmes over the next few years.
Bill Thomas, global chairman and chief executive of KPMG, said: “CEOs are increasingly putting ESG (environmental, social, and governance) at the heart of their recovery and long-term growth strategies.
“The unfolding climate and societal crises have made it clear that we need to change our ways and work together.”