Australian CEOs outpace global peers in economic optimism

7 October 2025

• 90% of Australian CEOs are optimistic on the growth prospects of our economy despite trade uncertainty, compared to 82% of CEOs globally who are upbeat about their own economies.
• The majority of Australian CEOs (70%) say that AI is a top investment priority, up from 58% a year ago.
• Just 22% of Australian CEOs now expect their workforce to be fully in office within the next three years, a sharp turnaround from 82% last year.
  

CEOs are increasingly optimistic on the growth prospects of the Australian economy over the next three years, despite a backdrop of global economic uncertainty, according to KPMG International’s annual CEO Outlook. The major study, now in its 11th year, covers 1350 CEOs in 11 leading economies, including Australia.

Australian CEOs were more confident in the domestic economy than their international counterparts, with 90% saying they were confident in Australia’s growth. That compared to 82% of CEOs globally who were confident in the growth expectations of their own domestic economies. Confidence in the growth prospects of their organisations remained high, with 80% of Australian CEOs saying they were optimistic over the next three years. Still, that optimism had softened somewhat, down from 86% a year ago.

“I’m not surprised that Australian CEOs are still feeling optimistic about the growth of our economy, given household spending has seen a recent uptick, and the RBA has cut the cash rate. While the global economy is still facing uncertainty, Australia is less impacted by tariffs than many other countries and so our export markets have remained strong,” said KPMG Australia CEO Andrew Yates.

When it came to the growth of the global economy, Australian CEOs were less optimistic than their US and Japanese counterparts, with 66% of Aussie leaders saying they were confident in global growth prospects over the next three years. That was an uptick from 62% a year ago, but lower than in the US, where 73% of CEOs were optimistic, and in Japan where 72% said they were confident.

AI and digital

Seventy percent of Australian CEOs indicated that AI was a top investment priority, up sharply from 58% last year. Still, nearly a third (29%) were committing less than 10% of their overall investment budget to AI. This was nearly double the proportion of companies globally (17%) investing less than 10% of their overall investment budget in AI.

Anticipated proportion of spending on AI over the next 12 months

The proportionately low investment levels among Australian CEOs were coupled with the fact that 40% of Australian CEOs admitted to learning as they go when it came to AI, compared to just 23% of companies saying they were ad-libbing globally. Still, Australian companies continued to tout their AI readiness, with 82 percent of Aussie leaders saying their board was equipped to navigate the adoption of and strategic use of AI.

“Without a national plan and effective regulation around the responsible use of AI, Australians are unwilling to trust it, and without trust there will continue to be a lack of investment. Without investment, we won’t be able to reap the full productivity benefits,” Mr Yates said.

“Australia stands at a pivotal moment in harnessing the power of AI, but adoption requires more than just enthusiasm, it requires a strategic plan that builds trust and confidence in its use.

“By empowering businesses to invest in AI and equipping the workforce with the necessary training, we can not only drive innovation but also ensure that the benefits of AI are shared equitably across the economy.”

When it came to mitigating business risk, cybersecurity and digital risks resilience were the biggest area of increased investment with 36% of Australian CEOs saying it was a focus area.

Return to office/talent

Australian CEOs backflipped on their return to office expectations, with just 22% saying they now expected corporate employees back in the office full-time in the next three years. That was a sharp drop in expectations compared to a year ago, when 82% of Australian CEOs said they expected their workforce to be fully in office in the next three years.

Asked what the expected working environment was for their corporate employees, 74% of Aussie leaders expected a hybrid model to continue, compared to 66% globally. Forty-eight percent of Australian CEOs expected hybrid with three days in the office, 8 percent said hybrid with two office days and 18 percent said hybrid with four days in the office. No Australian CEOs thought that roles would be fully remote.

“The majority of CEOs have said that they’ve found three days a week in the office to be the sweet spot, but I think ultimately it’s about what works for each business,” Mr Yates said.

“The numbers confirm what we have long suspected: a return to a fully back-in-the-office workforce in Australia is unlikely.”