The share of Russian executives who believe their businesses have deteriorated over the past six months has decreased by a factor of 2.5 and now stands at 11%, compared with the results obtained in December 2022, which might be indicative that the Russian economy is on the mend. At the same time, companies attach increasingly more importance to the objectives aimed at business development, finds CEO Barometer, a study carried out by Yakov & Partners experts ahead of the XXVI St. Petersburg International Economic Forum.
The authors report that cost trimming is no longer a top priority as it is now ranked as low as 7th. At the same time one in three respondents mentioned new investment projects and breaking into new markets as their priority.
"All in all, positive sentiments prevail in the business community. Only 11% of the respondents believe that the situation has recently deteriorated, and every second business leader expects the situation to improve over the next six months. It is worth mentioning that companies' priorities have shifted. While at the beginning of this year cost cutbacks and supply chain adjustments were at the top of the list, talent attraction, tapping into new markets and launching new investment projects have now returned to the fore. In fact, over the past six months Russian companies have gone on the attack after being on the defensive for a while"
Foreign trade restrictions, geopolitical tensions, and supply chain disruptions remain the main challenges for Russian business leaders.
Since the beginning of the year perception of the situation has improved1 most in the metals and mining sector (up from 37% to 48%), FMCG, retail, and e-commerce (up from 46% to 78%); meanwhile chemical players noticed a decline2 in their businesses (up from 25% to 31%).
"Representatives of the tech sector, IT, and banks tend to be the most optimistic when assessing their prospects, as an average of 68% to 80% of the respondents expect things to pick up. This more or less reflects the trend towards import substitution in tech and IT"
In terms of technology, 63% of the respondents expect the development of artificial intelligence to have some sort of impact on their companies within 1 year (the share was even higher among the leaders of the banking sector, technology and IT, retail and FMCG players). Only 7% of business leaders believe artificial intelligence will pose risks to their businesses, and one in three respondents do not expect AI to have any impact on their businesses.
The anonymous survey involved 126 CEOs of companies with an annual turnover of RUB 5 bn from all major sectors of the Russian economy, including banking, IT and telecom, metals and mining, oil and gas, retail and e-commerce, agriculture, chemicals, machine building, and energy industries.
1 "Improved" response option
2 "Deteriorated" response option