Divergence defining business: sector and regional gaps matter more than ever

The global business narrative at the beginning of the year was one of alignment on the need to adapt amid uncertainty: strong growth expectations, shared priorities around technology investment, and this broadly consistent response to disruption. That consensus is now fragmenting. Our latest findings, six months on from the initial business outlook, reveal a widening divergence of ambition across sectors and regions: how they’re experiencing, interpreting and responding to the same environment in the pursuit of their unwavering growth ambitions.

For C‑suite leaders, this shift is important to recognise and critical to address. Growth remains strong on paper, with 92% maintaining a positive outlook and, although market conditions are also rated favourably for growth [link to navigating market conditions article], there’s no longer one path to achieve it. Instead, we’re seeing a more complex map of opportunity defined by local pressures, sector economics, and sharply differentiated exposure to global change and shocks.

A global environment, experienced differently

The most immediate divergence is regional. Economic pressures remain a constant, but their relative weight varies significantly. In Latin America, more than half of executives identify economic factors as the biggest trend impacting business, which is much higher than other regions. While, in North America, the same pressures are also pronounced but accompanied by a stronger focus on artificial intelligence and trade competition dynamics.

Elsewhere, the story shifts again. Energy prices and shortages dominate in Africa and Western Europe, while in the Middle East and Central and Eastern Europe geopolitical instability has become the burdening concern, now reaching as high as 65% in the Middle East. This is not a marginal variation. It signals fundamentally different operating conditions and therefore controls different leadership priorities.

Even perceptions of opportunity are uneven. Executives in the Middle East and Africa are significantly more likely to rate domestic growth conditions as “very favourable” (57% and 51% respectively), while leaders in Western Europe and CEE lag considerably behind. At the same time, Asia-Pacific stands out for its comparatively positive response to global activities, with 70% reporting a positive impact on conditions for business from recent world events – far exceeding that of other regions.

As a result, global strategies should not be re-shaped by centralised assumption, it’s increasingly controlled by local realities.

Sector economics are driving different strategic trade-offs

A similar divergence is taking hold across industries, particularly in how organisations are absorbing global pressures. Energy & Infrastructure and Manufacturing sector businesses are significantly more exposed to margin compression, with 48% and 43% respectively reporting squeezed profitability. These sectors are absorbing cost volatility directly, no doubt to avoid risks in customer loyalty, and reflecting limited pricing flexibility and heavy exposure to input costs.

By contrast, Consumer businesses are the most able and likely to pass cost increases on to customers, with 59% doing so, preserving margins at a time when others cannot. This disparity in pricing power is emerging as a key differentiator in resilience.

The TMT sector is experiencing another divergence in its performance from transformation. TMT businesses are recording the strongest returns from their AI investments, with 28% reporting returns up to 20%, outperforming all other sectors. This reflects earlier and deeper investment but also highlights a growing gap between leaders that are realising tangible returns and those late to the game that are now still building capability.

Investment patterns mirror this divide. While overall boosts to investment have softened, it is still healthy and being redirected towards operational resilience, particularly supply chains rather than broad-based operational needs. Yet within this shift, sectors with stronger digital maturity continue to prioritise AI and customer-facing capabilities, signalling the split between defensive and offensive investment strategies.

From global consistency to strategic divergence

Perhaps the clearest shift from six months earlier is not in the data itself, but in its coherence. Our initial outlook for the year ahead showed a relatively consistent set of priorities defined the global C-suite agenda. By mid-year, those priorities have begun to fragment.

The rise of energy costs/shortages (up 12 points), geopolitical instability (up 8 points) and supply chain (now in the top five challenges) as key trends reflects the reality of the more volatile backdrop, but this volatility is not evenly distributed. As a result, confidence has fallen sharply to 35%, even as growth expectations remain stable.

Over half of leaders have already diversified resources in the last six months in response to geopolitical events, with the highest acceleration in Latin America and Asia-Pacific. Growth strategies are also being reshaped, with plans for boosting trade relationships growing in Greater China and operations in Central & Eastern Europe increasingly more attractive to every other region.

Preparing for what’s next: a sector or regional strategy that defies the norm

The mid-year picture is one that demands a more nuanced approach to strategy: one that recognises that performance will increasingly be determined by alignment to sector and regional realities. Three considerations emerge. First, leaders must anchor decisions in local conditions, rather than global averages. Second, sector positioning, particularly around cost management and pricing power, will be critical in determining resilience. Third, the ability to translate investment, especially in AI, into measurable returns is becoming a defining differentiator.

The old approach of broadly shared playbooks has ended as a result of a more complex landscape where diversification is critical to success. Growth remains achievable, but organisations and their leaders need to understand and act on the specific dynamics shaping their markets. Success can come from following global trends but will certainly be achieved from recognising the local differences within it.