CEO’s around the world are in the middle of a mindset shift, according to new research from EY, with chief execs showing renewed focus on strategic transactions and resilience to navigate an economic landscape characterised by persistent volatility.

The latest EY-Parthenon CEO Outlook Survey found that CEO confidence is climbing, with EY’s Confidence Index now standing at 83, up seven points since May, as business leaders grow more assured in steering their businesses through turbulent times.

The survey data shows, however, that CEO resilience does not stem from a belief that current conditions will ease. 

Rather, EY found that the increase in confidence reflects leaders becoming acclimatised to uncertainty, better at rewiring operating models, and becoming more agile, finding new ways to thrive despite the shifting sands of the global economy.

The survey found that CEOs are actually embracing the chance for change, with more than half (52%) planning to increase their investments to accelerate portfolio transformation in the next twelve months, and a further 39% maintaining a level of transformation consistent with recent years.

Particular shifts gaining traction highlighted in the report are businesses moving toward localisation, such as producing goods in the country where they will be sold, and regionalisation, for instance, creating regional supply chains to serve a particular bloc.

Almost three-quarters (72%) of CEOs surveyed say they regard localisation as a long-term strategic shift, with 63% echoing this sentiment from a regional perspective. EY said that this shift is largely driven by the need to adapt to changing market dynamics and customer expectations, allowing companies to respond more swiftly to local demands.

Most CEOs agreed this is not a trend or a blip, but a significant change in the landscape, and will form a key part of their strategy over the long term.

However, even with this renewed confidence in their plans, EY’s study shows CEOs are openly acknowledging the challenges they face.

The majority (79%) agreed that inflation will remain an operational headwind over the coming year, with tariffs also predicted to be a challenge (78%). The outlook is split, with 57% seeing this geopolitical uncertainty lasting beyond the next twelve months, and 24% expecting it to stretch well beyond three years.

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Technology, a key driver of CEOs’ plans, is also presenting challenges, with 69% believing cybersecurity threats are hampering their efforts to confidently innovate, and 70% saying the primary obstacle to digital transformation is not technology itself, but the challenges caused by fragmented and inconsistent regulations across territories.

In better news, M&A activity remains robust, with almost half of CEOs (48%) expecting to pursue traditional deals, and 73% anticipating taking part in joint ventures or strategic alliances.

Notably, 41% of CEO respondents pursuing M&A are targeting companies for their technology or intellectual property (IP), underscoring the critical role of technological innovation in today’s competitive landscape.