Economic risks, weather & talent shortage among top concerns for APAC businesses: Marsh, Zurich

Economic headwinds and escalating climate risks are the most pressing concerns for businesses across the Asia Pacific (APAC) region, a new survey conducted by the World Economic Forum, and released in partnership with Marsh McLennan and Zurich Insurance Group, has revealed.

According to the Executive Opinion Survey business leaders are increasingly worried about the impact of potential recessions, natural disasters, and labour shortages.

The survey gathered insights from over 11,000 business leaders in 121 countries. In APAC, economic downturn fears dominate in most sub-regions, including Oceania, Southeastern Asia, and Southern Asia.

However, in Eastern Asia, labour and talent shortages, initially identified as a top five risk last year, have risen in prominence, surpassing economic concerns as the top risk.

Sid Medappa, Chief Risk Officer APAC, Zurich Insurance Group, commented: “The APAC region continues to face a dynamic risk environment, with uncertainty around the economy leading the agenda. These challenges are compounded by escalating climate risks, socioeconomic disparities, talent shortages and geoeconomic tensions. They outrank the risks around adverse outcomes from the usage AI technologies and cyber risk which has been a concern for several years and remain key risks in the region.

“As we head into 2025, the ability to build resilience will hinge on how businesses adapt to these interconnected risks. Businesses in the region need to adopt a proactive, holistic approach to risk management to safeguard their operations and target opportunities for sustainable growth in an increasingly unpredictable global environment.”

The survey also highlighted the growing concern over climate risks, particularly in Oceania and Eastern Asia. Extreme weather events, such as floods and heatwaves, are becoming more frequent and intense, underscoring the need for greater climate resilience.

Among its findings, the survey revealed that inflation also continues to be a dominant concern, exerting pressure on both business costs and consumer spending.

Oceania and Southeastern Asia are among the hardest hit by rising prices, amplifying the challenge of sustaining growth in these regions.

Socioeconomic disparities, such as poverty and income inequality, are persistent challenges in Southern Asia and are also emerging in Oceania and Southeastern Asia.

According to the survey, these issues are exacerbated by unemployment and a lack of economic opportunities in Southern and Southeastern Asia.

Additionally, Eastern Asia faces ongoing disruptions in supply chains and investment flows from trade tensions and geopolitical conflicts.

To address these interconnected risks investments in climate resilience, workforce development, and inclusive socioeconomic policies are crucial, the report highlighted.

Moreover, fostering economic cooperation across the region can help mitigate the impact of global uncertainty, ensuring businesses can adapt and thrive in an increasingly volatile world, it concluded.