“I think what’s happened is there’s now a bit more recognition that inflation is probably going to be a bit higher than what we saw in the decade from 2010 to 2020,” he says, with businesses having to consider both the extent to which they can adjust prices and how they can manage costs through productivity growth.
Loading
Productivity has been at the forefront of politics in the past year. Treasurer Jim Chalmers held an economic reform roundtable in August aimed at finding ways to revive the nation’s lagging standard of living growth and the Productivity Commission last year made 47 reform recommendations aimed at boosting the measure.
Finding ways to drive productivity growth was also among the top challenges nominated by business leaders in 2026, with more than two-thirds (35 per cent) putting it among their top five.
Despite the challenges, Yates notes businesses are more optimistic than they were 12 to 18 months ago, and that concerns such as staff shortages have faded.
“If you went back three to four years ago, particularly as we came out of COVID, the No.1 issue was attraction and retention of talent,” he says. “That really has disappeared right down the list.”
The unemployment rate, which hit a historical low of 3.5 per cent in 2022, is now hovering above 4 per cent, with the latest figures from the Australian Bureau of Statistics showing it remained steady at 4.3 per cent in November.
Yates also says business leaders are more positive in their outlook when it comes to matters such as investment and looking to expand their firms.
“There are challenges CEOs have reported this year, such as continuing to look for growth, which are more positive,” he says. “That’s opposed to if you’re in the depths of a recession, and you’re needing to lay off staff, for example. That’s a much harder, more negative issue to be dealing with, and we’re not seeing that come through the survey whatsoever.”
The proportion of business leaders concerned about cyber risks remained steady across the two years at 42 per cent.
Loading
Housing affordability remained among the top societal issues flagged by CEOs, with about half – the same share as last year – citing it as a worry. However, the top spot in 2026 was claimed by a new option in the survey: the social impact of new and disruptive technologies such as AI.
Yates, who believes the use cases of AI will become more obvious this year for many businesses, says the rise of AI as a concern among business leaders has probably been fuelled by the emergence of generative technologies such as ChatGPT, as well as the boom in investment in the technology.
“There’s an awful amount of investment being deployed into AI,” he says. “There’s a sense that if you’re not investing, if you’re not riding the wave, then there’s a real possibility you may get left behind.”
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
