What happens: The 2026 CEO Institute Survey shows that leaders are recalibrating strategy, reassessing risk and investing selectively to build resilience in an era when volatility has become structural.
Why this matters: CEOs are responding to a complex mix of economic, technological and geopolitical pressures rather than a single dominant threat. Changes in US trade policy have emerged as the biggest geopolitical risk, with nearly six in ten respondents more concerned about geopolitically driven trade disruptions than they were 12 months ago.
The research shows that 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 problem overall and are felt most acutely in New Zealand.
The slowdown in consumer demand is also weighing heavily, with around one in five respondents expecting this to have the biggest impact on business performance in 2026. Technology disruption is the third most cited challenge, chosen by 16 percent of Australian and 18 percent of New Zealand respondents. This reflects growing unease about the pace and consequences of AI, automation and cyber risks.
Labor and skills shortages continue to feature prominently, especially in Australia, where 15 percent of businesses nominate this issue as the external issue likely to impact performance over the next 12 months, compared to eight percent in New Zealand. Regulatory reform and policy change are also expected to have a material impact, as indicated by 13 percent of Australian and 10 percent of New Zealand businesses.
Overlaying these domestic pressures is global instability, which is now the top priority for around one in ten companies in the region.
Trade policy change
Geopolitics has shifted decisively from background concern to operational reality, with shifts in US trade policy emerging as the biggest geopolitical risk for Australian business leaders. Nearly six in 10 survey respondents said they are more concerned about geopolitical trade disruptions than they were 12 months ago.
Nearly one in five cite trade disruptions as one of the top three geopolitical threats facing their business in 2026, while 47 percent expect them to have a moderate to very significant impact on business. Other geopolitical risks mentioned include global commodity price volatility caused by conflict, at 12 percent, and tensions between Australia and China, at 10 percent.
This finding is consistent with broader industry trends. McGrathNicol research among more than 300 Australian executives shows that 80% expect geopolitical issues to challenge business operations within 12 months, up from 66% in 2024, according to research published by Dynamic Business in September 2025.
At the same time, leaders identify new opportunities arising from a changing global landscape. Nearly one in five respondents see the demand for crucial minerals, driven by the energy transition, as an opportunity. ASEAN was nominated as a priority growth market by 15 percent of respondents, followed by India at 13 percent and the Pacific markets at 10 percent, indicating a push to diversify revenues while staying within strategically closer regions.
A further nine per cent expect increasing global demand for Australian agricultural exports, while six per cent see opportunities in ‘friendshoring’ or ‘nearshoring’ supply chains.
According to Chad Gates, CEO of Pronto Software, these forces create a feeling of constant acceleration. “There are many factors that CEOs feel they cannot control as well as they would like. Some of them are geopolitical and environmental, but when you add in rapid technological change, the world can feel like it is spiraling out of control.”
Despite these mounting pressures, the prevailing mood among ANZ CEOs is not one of despair, but of cautious growth under pressure. According to this year’s CEO Institute Survey report, 41 percent of Australian and 57 percent of New Zealand respondents plan to grow and expand by 2026.
Richard Wynn, Chief Executive Officer of The CEO Institute, describes the leadership mindset as a mix of vigilant optimism and measured realism.
“CEOs can see opportunities on the horizon, but they are very aware of the constraints and shocks that could hit them, both from the domestic economy and from the geopolitical environment. Geopolitics is now in both the risk and opportunity columns.”
However, Mr Wynn notes that most survey respondents are not confident Australia will glide smoothly through the great power competition. “Alarmingly, only a small minority report making significant structural changes to their supply chains, market mix, capital plans or business models in response. This suggests we are in a transition phase, where leaders recognize that the rules have changed but are still figuring out how to translate that into practical decisions.”
He adds a more positive note about the direction of travel. “But overall the direction is positive. More and more boards are asking the right questions about exposure, alliances, supply chains and regional strategy. The next step is to translate those questions into standing agenda items, clear risk appetite statements and concrete structural decisions, rather than incidental conversations when a crisis flares.”
Limited action taken
Supply chain disruption is no longer seen as a legacy problem of the COVID-19 pandemic. As geopolitical volatility becomes structural, supply chains have shifted from the back office to the boardroom.
Although awareness has increased significantly, action remains limited. Only about seven percent of respondents said their organization made a structural change in the past year in response to geopolitical risks. Among this group, supply chain diversification was the most common move, while roughly 93 percent have not yet changed their structural footprint.
Mr Wynn believes this reflects complexity rather than complacency. “CEOs are asking tougher questions about concentration, alternative suppliers and regional exposure. 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 costs of change.”
AI opportunities and fear
Technology disruption increases geopolitical risk: 13 percent of respondents see cyberattacks linked to state actors or geopolitical tensions as the biggest threat in 2026, a figure that Gates says may underestimate the true level of exposure.
“That number feels lower than it should be. CEOs should probably be more concerned about state-sponsored cyberhacking, especially when it comes to things like denial of service and taking people off the air.”
As volatility increases, many leaders are turning to AI to regain speed, visibility and control. The research shows that 22 percent of Australian and 16 percent of New Zealand businesses plan to prioritize digital transformation and innovation by 2026.
However, Gates warns that many organizations are still unclear about what meaningful AI adoption looks like.
“Everyone thinks they need AI in their business, but they don’t always know what that really means or how to get the most out of it. AI represents endless possibilities, endless opportunities and endless fear of missing out. But there is also a growing concern about security and AI deepfakes, because as technology accelerates, so does the cybersecurity arms race.”
The research reveals a business landscape where leaders are alert to risk but still navigating the practical challenges of restructuring for a more volatile world. While optimism remains, the transition from awareness to action represents the next critical phase for Australia and New Zealand’s business strategy.
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