Wary but determined
Metals CEOs are markedly more pessimistic about the economic outlook than their counterparts in other sectors: just 24% believe the economy will improve this year (compared to 37% of the overall sample). And fewer are very confident of growth, compared to the total sample. Nonetheless, 75% still expect to increase their company’s revenues in the next 12 months. Like CEOs in other industries, they’re looking to the US, China and Germany to generate growth.
Metals CEOs are more inclined to think threats to growth have increased over the past three years than their peers in any other industry. They’re particularly concerned about the increasing tax burden, impact of government indebtedness and over-regulation. And they are also less likely to think that opportunities for growth have increased.
Metals CEOs are also much more anxious about the prospect of greater competition from direct and indirect competitors than CEOs in other areas of business. Of all the forces they expect to disrupt their industry in the next five years, this is by far their biggest source of concern.
Eyes on adjacent industries, diverse partnerships
More than half of all metals CEOs believe it’s increasingly likely that companies from one sector will enter others in the next few years. They anticipate that most of this new competition will come from the industrial manufacturing, energy, utilities and mining, and construction industries. These are the same industries they themselves have been tracking, with an eye on the opportunities for expansion. But only 27% of metals CEOs have actually made the leap to date. That said, 22% have considered breaking into new industries, so more may follow.
New strategic alliances are another area of interest: 54% plan to partner with other entities (primarily customers, suppliers, academia or firms from other industries) in the coming 12 months. That’s a huge leap from last year, when only 16% planned to collaborate. Their top reasons for collaboration are to access new/emerging technology, new customers and new geographic markets.
Cautious about digital transformation
Metals CEOs are distinctive in yet another respect: they place much less weight on almost every new digital technology for transforming their businesses than CEOs in other industries. Only 46% think mobile technologies for engaging with customers are strategically significant, for example, compared to 81% of the overall sample. In fact, the only technologies metals CEOs rate more highly than their peers in other sectors are robotics and 3D printing.
The percentage of metals CEOs who say digital technologies are creating very high value for their businesses is likewise much lower than it is in the total survey population. But attitudes within the industry may be partly blame here. Only 66% of metals CEOs think it’s important that they champion the use of digital technologies. In our overall sample, by contrast, a full 86% of respondents believe the CEO plays a key role in encouraging take-up of such technologies.
Looking for the right people
A full 85% of metals CEOs worry about finding candidates with the right skills, compared to 73% of CEOs overall. Yet they’re doing less to counteract the problem. Only 59% have widened the search for talent, and only 41% have adopted a strategy for promoting talent diversity. That’s below the levels in most other industries.
Continuing to streamline operations
Metals CEOs are acting when it comes to operating efficiently though. A full 90% say they will start a cost reduction initiative this year.