CEO INSIGHTS – Week Ending 22 December 2023

Industrials & Domestic Economy

“Demand remains robust in our primary end markets [mining and resources, infrastructure, commercial construction and industrial]. The Group has very modest exposure to segments of the economy that are slowing, namely household discretionary expenditure and residential construction” Market Statement, Coventry Group Ltd

“The economies in Australia and New Zealand remain remarkably robust with unemployment holding at low levels and wage growth solid. But the outlook is certainly more challenging” Shayne Elliot, CEO, ANZ Bank Group Ltd

Technology

“This idea that every piece of the economy of our lives is becoming more dependent on digital. Everything digital runs on semiconductors. In this idea of the ‘Siliconomy’, how essential it's become, God's gift…Today, about 25% of our economy is built on silicon, by the end of the decade…maybe a full 1/3 of the entire GDP is based on silicon” Patrick Gelsinger, CEO, Intel Corp

“Turning to data and AI. We estimate that less than 10% of companies have mature data and AI capabilities” Julie Sweet, CEO, Accenture Plc

Snack Foods

“I think the first thing we point to is if you look at the category over time, it has consistently demonstrated 2 to 3 [percentage] points of price increases per year” Howard Friedman, CEO, Utz Brands Inc [potato chips food brand conglomerate]

Pets

“I don't need to go into the details of why trust is important to acquire and retain customers, but in a business like this, in pet, relationships matter more, even more so than in any other businesses that we're a part of as consumers out there” Sumit Singh, CEO, Chewy Inc

Construction & Sustainability

“Like any business an increase in inflation and interest rates has an impact on costs. However, we’re not seeing rising capital costs leading to significant project cancellations or deferrals with the majority of our customers continuing to invest in sustainability and remaining focused on their long-term strategies” Chris Ashton, CEO, Worley Ltd

Housing

“If you look at housing cycles, you can see some early indicators at the moment of house prices have stabilised, clearly demand’s very strong with population growth and supply of approved zoned land remains very scarce around the country” Tarun Gupta, CEO, Stockland Ltd

Global Investment & Regulation

“I can tell you that many other nations around the globe are pursuing policies that make them more competitive and more investment friendly. Capital will flow to where the best risk and returns exist and the opportunities elsewhere are looking increasingly more compelling” Mike Henry, CEO, BHP Group Ltd

Retail

“November trading, by all accounts, appears to have been strong, despite cost-of-living pressures, as shoppers capitalised on unprecedented deals and sales to tick off their Christmas lists early. This has helped prop up our pre-Christmas projections somewhat” Paul Zahra, CEO, Australian Retailers Association

Energy & Investment

“The scale of the transformation needed to hit the targets by 2030 is hard to overstate. For example, Australia needs to add 1.5 times the current renewable energy production in six years – noting the existing stock took 20 years plus to bring to life” Mark Collette, CEO, EnergyAustralia

“Having been in this industry for decades, I've never seen such strong support for nuclear power. However, while policy and legislative changes are extremely important, big industrial energy consumers are not waiting for those government decisions and are moving much more quickly” Timothy Gitzel, CEO, Cameco Corp [world’s largest listed uranium company]

Farming & Vehicles

“Wholesale sales of farm vehicles [ATVs and Side by Sides] are slowing, with increased competition as stock levels for all distributors normalise. The competitive environment is putting pressure on margins. While retail unit sales of new motorcycles remain strong, wider economic conditions are driving margin pressures affecting all areas of the business” Market Statement, MotorCycle Holdings Ltd

“We aren't seeing a lot of surprises in the retail environment right now” Michael Happe, CEO, Winnebago Industries

Supply Chain & Logistics

“I mean you've got to take a step back and look at the vagaries of the global supply chain over the last few years. The pandemic was one of those biggest supply chain ‘bullwhip effects’ we've seen in the last 30 to 40 years, and we are in the aftermath of that. We have seen now multiple quarters of the market being down. So here we are in a situation where we are growing faster in the market and yet the overall demand environment is weak for our sector” Rajesh Subramaniam, CEO, FedEx Corp.

Workplace & Furniture

“Orders in the large corporate customer segment have been strengthening over the past year…Customers are looking to invest in spaces that solve for a host of needs, such as providing places to focus, collaborate, build social connections, and foster wellbeing” Sara Arumbruster, CEO, Steelcase Inc [world’s largest office furniture company]