Geopolitical Shifts, Inflation and AI Critical Concerns For CEOs, New Survey Reveals

Despite inflation, weak demand and global instability, CEOs are not retreating — but their definition of growth has fundamentally changed

Despite inflation, geopolitical instability, technological disruption and increasingly complex operating environments, business leaders across Australia and New Zealand remain “vigilantly optimistic” and are planning for “cautious growth under pressure”, according to the 2026 CEO Institute Survey report.

Now in its ninth year, the white paper detailing the survey results was launched by leading Australian-owned enterprise resource planning (ERP) and analytics software provider Pronto Software, in partnership with The CEO Institute. Based on insights from senior business leaders across Australia and New Zealand, the report reveals how CEOs are recalibrating strategy, reassessing risk and investing selectively to build resilience in an era where volatility has become structural.

While uncertainty is now the operating norm, the findings suggest leaders are not standing still. From AI and digital capability to supply chains, geopolitics and long-term planning, CEOs are increasingly treating disruption as a catalyst for more disciplined, future-ready decision-making.

Survey reveals top challenges confronting CEOs

The survey shows leaders are responding to a complex mix of economic, technological and geopolitical pressures, rather than a single dominant threat.

• Inflationary pressures remain the most pressing issue overall and are being felt most acutely in New Zealand.

• Consumer demand slowdown is also weighing heavily, with around one in five respondents expecting it to have the greatest impact on business performance in 2026.

• Technology disruption ranked as the third-most cited challenge, selected by 16% of Australian and 18% of New Zealand respondents, reflecting growing unease about the pace and consequences of AI, automation and cyber risk.

• Labour supply and skills shortages continue to feature prominently, particularly in Australia, where 15% of businesses nominated them as the external issue most likely to affect performance over the next 12 months, compared with 8% in New Zealand.

• Regulatory reform and policy change are also expected to have a material impact, cited by 13% of Australian and 10% of New Zealand businesses.

Layered over these domestic pressures is global instability, which is now top of mind for around one in 10 businesses across the region.

Geopolitical threats and supply chain shifts

Geopolitics has shifted decisively from background concern to operational reality, with US trade policy shifts emerging as the single biggest geopolitical risk for Australian business leaders.

Almost six in 10 survey respondents said they are more concerned about geopolitically driven trade disruptions than they were 12 months ago. Nearly one in five identified trade disruptions as one of the top three geopolitical threats facing their business in 2026, while 47% expect them to have a moderate to very significant impact on operations.

Other geopolitical risks cited include global commodity price volatility driven by conflict (12%) and Australia–China tensions (10%).

At the same time, leaders are identifying new opportunities emerging from a changing global landscape. Almost one in five respondents see demand for critical minerals driven by the energy transition as an opportunity. ASEAN was nominated as a priority growth market by 15% of respondents, followed by India (13%) and Pacific markets (10%), suggesting a push to diversify revenue while remaining within strategically closer regions.

A further 9% anticipate increased global demand for Australian agricultural exports, while 6% see opportunities in friendshoring or nearshoring supply chains.

According to Chad Gates, Managing Director of Pronto Software, these forces are creating a sense of constant acceleration.

“There are a lot of factors that CEOs feel they can’t control as well as they would like to,” he says. “Some of those are geopolitical and environmental, but when you add rapid technological change, the world can start to feel like it’s spinning out of control.”

Growth mindset under pressure

Despite these increasing pressures, the prevailing mood among ANZ CEOs is not one of despair, but ‘cautious growth under pressure.’ According to this year’s CEO Institute Survey report, 41% of Australian and 57% of New Zealand respondents are planning to grow and expand in 2026.

Richard Wynn, Chief Executive Officer of The CEO Institute, describes the leadership mindset as a blend of “vigilant optimism” and “measured realism.”

“CEOs can see opportunities on the horizon, but they are very conscious of the constraints and shocks that could hit them from both the domestic economy and the geopolitical environment,” he says. “Geopolitics now sits in both the risk column and the opportunity column.”

But Mr Wynn notes most survey respondents do not feel confident that Australia will glide ‘smoothly’ through great power competition.

“Alarmingly, only a small minority report making significant structural changes to their supply chains, market mix, capital plans or operating models in response,” he explains. “This suggests that we are in a ‘transition phase’, where leaders recognise that the rules have changed but are still working through how to translate that into practical decisions.

“But overall, the direction of travel is positive,” Mr Wynn says. “More Boards are asking the right questions about exposure, alliances, supply chains and regional strategy. The next step is to turn those questions into standing agenda items, clear risk appetite statements and concrete structural decisions, rather than occasional conversations when a crisis flares.”

Supply chain disruption now a boardroom issue

Supply-chain disruption is no longer viewed as a legacy issue from the COVID-19 pandemic. As geopolitical volatility becomes structural, supply chains have moved from the back office to the boardroom.

While awareness has risen sharply, action remains limited. Only around 7% of respondents said their organisation has made a structural change in response to geopolitical risk in the past year. Among that group, supply chain diversification was the most common move, while roughly 93% have not yet altered their structural footprint.

Mr Wynn believes this reflects complexity rather than complacency.

“CEOs are asking harder questions about concentration, alternative suppliers and regional exposure,” he says. “They are more willing to trade some efficiency for resilience – for example, through dual sourcing or modest inventory buffers – but many are still constrained by legacy contracts, market structure and the cost of change.”

AI, cyber attacks, technology and a new world disorder

Technology disruption is compounding geopolitical risk, with  13% of respondents identifying cyberattacks linked to state actors or geopolitical tensions as a top threat in 2026 – a figure Mr Gates believes may understate the true level of exposure.

“That number feels lower than it should be,” he says. “CEOs probably should be more concerned about state-sponsored cyber hacking – particularly around things like denial of service and knocking people off air.”

As volatility intensifies, many leaders are turning to AI to regain speed, visibility and control. The survey found 22% of Australian and 16% of New Zealand businesses plan to prioritise digital transformation and innovation in 2026.

However, Mr Gates cautions that many organisations are still unclear on what meaningful AI adoption looks like.

“Everybody thinks they need AI in their business,” he says, “but they don’t always know what that really means or how to get the best out of it. AI represents endless possibility, endless opportunity, and endless fear of missing out. But there is also growing concern around security and AI deepfakes – because as technology accelerates, so does the cyber-security arms race.”