AUS
NZ
UK
CA
USA
IND
Highlights
- Geopolitical tensions and societal issues are top concerns for Australian business leaders.
- Cost management and innovation are key priorities as challenges continue to mount.
- Housing affordability, particularly for young Australians, tops the list of growing concerns.
Geopolitical uncertainty remains a significant concern for Australian business executives as they face mounting challenges heading into 2025. The latest KPMG survey, “Keeping Us Up at Night,” reveals that issues such as social concerns and global political developments have steadily climbed on the list of worries for Australian leaders.
Beyond the typical "bread and butter" responsibilities like managing costs, increasing returns on investment, and driving revenue through innovation, executives are also contending with the fallout of heightened geopolitical tensions. According to KPMG’s findings, 2024 saw more than half of the world's population participating in democratic elections. These elections revealed two dominant trends: a backlash against incumbent governments over cost-of-living issues and the rise of populist leadership combined with economic nationalism. Leaders worldwide, including those representing companies like (ASX:XRO) Xero, are feeling the effects of these shifting political landscapes, which have increasingly shaped business operations.
An analysis of Australia’s private sector in the past year reveals a concerning decline in profit margins. The gross operating surplus of private non-financial corporations fell by 5.6% for the fiscal year 2024, according to the Australian Bureau of Statistics (ABS) National Accounts. In fact, 80% of the 15 sectors analyzed saw either a flat or declining gross operating profit relative to sales revenue. This shift suggests that despite positive macroeconomic changes, businesses are feeling the impact of both external geopolitical events and internal operational pressures.
Geopolitical issues such as the rising concerns over supply chains, punitive tariffs, and inward-looking government policies have returned to the forefront, exacerbating the challenges for global leaders. Companies like (ASX:CBA) Commonwealth Bank have had to adapt their business strategies to navigate these turbulent waters, which have made markets more competitive and business environments harder to predict. As concerns over trade tensions grow, the cost of doing business continues to increase, resulting in heightened anxiety for many executives.
A noteworthy shift in priorities revealed by KPMG’s survey is the rise of housing availability and affordability as a primary concern. Once a lower-ranking issue, it has now moved to the top of the agenda for business leaders. The growing frustration surrounding this problem, particularly regarding its impact on young people, signals a need for significant long-term change in housing policy.
As challenges continue to mount, Australian executives are being forced to think beyond immediate issues, planning for a medium-term future that requires addressing both geopolitical factors and foundational social concerns.
