The resilience of the global economy is highlighted by a record number of leaders expecting an increase in profitability over the next 12 months, with 53% expecting an increase in their sales, according to Grant Thornton's latest International Business Report (IBR).

These results led to increased optimism, despite forecasts showing that global GDP growth will remain below historical averages. Uncertainty created by record numbers of people, along with ongoing challenges posed by inflation and higher interest rates, are seen weighing on growth forecasts. So why are business leaders so optimistic about their business? This could be driven by a record number of respondents expecting increased investment in information technology and a record number of respondents expecting increased investment in research and development. With sales prices and profitability expected to rise – absorbing any lingering inflationary pressures – and optimism remaining high, businesses are clearly confident in long-term investment.

With all the hype surrounding artificial intelligence and its potential impact on business, it is no surprise that leaders are choosing to invest in this potentially transformative area. However, this is unlikely to lead to mass layoffs. A record number of respondents also expect an increase in investment in the workforce. This would suggest that investing in technology, along with investing in talent, is a winning combination to achieve sustainable growth.

Economic uncertainty remains the top business constraint cited by leaders. Businesses may not invest in technology just for productivity reasons. With 50% of leaders citing cybersecurity as a constraint, it could also be a defensive investment as cyberattacks become more frequent and sophisticated. Surprisingly, lack of financial resources is the least mentioned concern for business leaders. This can be explained by the fact that more companies keep excess cash on their balance sheets according to research, which acts as a form of insurance against unwanted events.

Despite the constant uncertainty created by geopolitical tensions, businesses simply cannot afford to do nothing. Those leaders who prioritize strategic investment and operational resilience to optimize their business will be best positioned to succeed. If you have questions or would like to receive information about this topic, please contact ourGrant Thornton experts.