Horváth CxO 2025: CEE executives shift focus from green to lean – digitalization and efficiency top priorities

• Companies in the region expect revenue growth in 2025, but operating profit margins (EBIT) remain under pressure, especially in manufacturing industries Most industries will see an increase in the number of employees in 2025, except for telecommunications (where the workforce will stagnate) and the automotive sector (decrease of about 2%)
• Inflation and labor shortages are perceived as the main risks for CEE countries, to which is added the dependence of exports on the German market and imports on Asian countries.

Central and Eastern European (CEE) executives are setting their priorities for 2025 focused on digitalization and cost optimization, in the context of persistent inflation and labor shortages – the region’s biggest challenges. These conclusions emerge from the “CxO Priorities” study, entitled “Fundamentals: The New Strategic Advantage – Navigating Trade Conflicts and Tech Disruptions”, conducted by Horváth, an international management consulting company, present on the Romanian market since 2005.

The Horváth study notes that the CEE region is no longer just “recovering” from Western Europe, but is actively repositioning itself, through industrial relocation closer to target markets and strategic public investments that are starting to redefine its role in the European economic landscape. The findings of the Horváth study highlight several major trends shaping the corporate agenda for 2025:

Domestic expansion and strategic investments are reshaping the region’s economic model, although dependence on Germany and regional instability continue to weigh on the outlook.

Services companies place digital transformation as their number one strategic priority, while manufacturers are placing greater emphasis on optimizing costs and profit structure. This contrast indicates a general reorientation towards productivity, resilience and modernization of value chains in CEE.

Sector dynamics are divergent: manufacturers prioritize volume growth to fulfill contracts, while service firms rely on pricing strategies and value-added offerings to protect their margins.

CEE companies favor stability and controlled growth, focusing on consolidating existing positions, through products and services already validated in the market. Thus, 38% of executives see consolidation as their primary strategy, while diversification remains a secondary approach (16%), reflecting caution, risk aversion and a focus on core competencies.

Macroeconomic risks and AI investments

Inflation is the main macroeconomic risk for CEE companies, followed by the shortage of skilled personnel (43% in manufacturing and 49% in services) and interest rate volatility.

At the same time, the dependence of exports on Germany (20–30% of the region’s total) makes the economies of the Czech Republic, Slovakia and Hungary vulnerable to developments in the largest European market. Almost 40% of companies in the region are considering relocating production processes closer to key markets, to reduce dependence on Asia and limit risks generated by geopolitical tensions.

Artificial intelligence is perceived as a strategic tool, with an average productivity increase estimated at 10-15% and the highest expectations of high productivity in areas such as IT and digitalization (20%), operations (19%) and sales (18%), over a three-year period. Although the use of AI is at an early stage in CEE (for administrative and operational processes), the trend is to expand towards strategic functions.

Different degrees of optimism across industries

While the services sector is more optimistic about the growth of operating profit margins (EBIT), companies in the manufacturing sector continue to feel the pressure of high costs and supply chains. The most pessimistic industries regarding profitability growth are the oil and chemical industries, along with automobile manufacturing, while the highest optimism is found in the automotive and industrial automation industries, along with financial services and energy.

In terms of employment, most companies in CEE, both in the manufacturing and services sectors, are counting on an expansion in 2025. Higher increases are expected in energy (+8%) and construction (+5%), and more modest in retail (+3%) or the petrochemical industry (+2%), respectively transport and logistics (+1%). However, there is one area where employment is expected to stagnate (0%) – telecom, and in another a decrease (-2%) – automotive.

Although sustainability and innovation occupy secondary positions (9th and 10th) among executives’ priorities, indicating a pragmatic orientation towards short-term operational resilience, sustainability remains on the agenda, even in a tense economic context: 73% of CEE companies maintain their net zero commitments or plan to achieve them earlier than the established deadline, compared to 82% globally.

“CEE companies are simultaneously facing inflationary pressures and talent shortages, but also major opportunities through digitalization and AI. The region has solid premises for resilient growth, supported by domestic demand and local investments. However, dependence on Germany and geopolitical uncertainties remain major risks, making diversification and strengthening regional value chains urgent. Those that transform these challenges into strategic agility and innovation will gain a strong competitive advantage in the years to come,” said Maria Boldor, Partner and Managing Director, Horváth Romania.

The detailed report on the CEE region from the Horváth study “CxO Priorities 2025”, was conducted in May-June 2025, by interviewing 130 CEOs and CFOs from 8 countries in Central and Eastern Europe, covering industries such as energy, manufacturing, automotive, retail, technology and financial services. The report is part of a larger global analysis, with over 1,000 respondents from 33 countries.

About Horváth

Horváth is one of the leading international, independent management consulting companies, also present on the Romanian market since 2005. The company was founded in Stuttgart in 1981 by Prof. Dr. Péter Horváth, one of the pioneers of Controlling in Germany, and has over 1,400 employees. Horváth has offices in Germany (Berlin, Düsseldorf, Frankfurt, Hamburg, Munich and Stuttgart), Austria, Romania, Switzerland, Hungary, Italy, Denmark, Saudi Arabia, the United Arab Emirates and the United States, but the company’s consultants are available to clients globally. Horváth is a member of Cordence Worldwide, the world’s leading active alliance of prestigious management consulting firms, with nearly 70 offices in 24 countries, located on three continents.