UK CEOs are adjusting their strategic investment plans as geopolitical, macroeconomic and trade uncertainties continue to disrupt global markets, according to the latest EY-Parthenon CEO Outlook survey.

The survey, which was compiled in April following the initial announcement of US trade tariffs, evaluates the optimism levels of 100 UK CEOs. Forty-three per cent of respondents identified geopolitical, macroeconomic and trade uncertainty as the main risk to their business achieving its growth targets in the next 12 months, with 83% delaying a planned investment because of recent trade policy developments. 

Tariff disruption creating investment delays 

The survey found that almost half (45%) of all respondents were very or extremely concerned about potential tariff increases impacting their company’s operations and sales in the coming year, whilst 40% were moderately concerned. 

Of the 83% of UK CEOs who have adjusted their investment strategies due to trade policy developments, a quarter (25%) have halted planned investments whilst 49% have delayed plans. Additionally, 39% have relocated operational assets to different geographies, while 26% have exited specific geographic markets altogether.

Respondents highlighted US-China and US-UK trade disputes as being the most impactful to their business activities, with 27% and 24% of UK CEOs respectively citing these as major concerns.

To mitigate the potential impact of increased tariffs, the survey indicates that UK CEOs have taken decisive action. Almost half of respondents (48%) plan to diversify their supply chains by shifting production or sourcing to non-tariff regions, while 44% are exploring domestic sourcing alternatives, and rebuilding supply networks locally. Furthermore, 42% intend to absorb additional costs internally through operational efficiencies and cost reductions, whereas almost one-third (32%) said they would be passing on the cost increases to their customers. 

“CEOs are navigating an extraordinary combination of structural, political, and economic headwinds that are reshaping the landscape for traditional forecasting,” commented Silvia Rindone, EY UK&I Managing Partner for EY-Parthenon. “In this climate of heightened uncertainty, agility and innovation must underpin strategic decision-making. Businesses that embrace adaptability, either by diversifying supply chains or harnessing technology, will be better equipped to manage immediate pressures, such as the current global trade disruption, and build resilience for the future.”

Deal-making remains high on the CEO agenda

Looking ahead, 97% of UK CEOs expect to actively pursue transaction initiatives over the next 12 months, with 60% focusing on mergers and acquisitions (M&A). The focus of acquisition strategies includes acquiring companies for their technology or intellectual property (37%) and complementary businesses to enhance capabilities (35%).

The survey also highlights a growing valuation gap between buyers and sellers which three-quarters (75%) of respondents believe will slow M&A recovery in the next year. It also found that 83% are actively embedding AI-enabled technology in their M&A processes.

“As the long-term impact of global trade disruption plays out, our data shows that many CEOs and executive teams are still exploring a range of strategic options, including M&A, to safeguard their competitive position,” added Rindone. “CEOs and companies that can remain strategically focused while others pull back could emerge stronger with a better market position and faster growth once the economy recovers.”