Directors increasingly concerned over productivity, rising business costs and AI: AICD
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The news: A new survey by the Australian Institute of Company Directors (AICD) has revealed that company directors are increasingly concerned about Australia’s productivity performance, rising business costs, and heightened geopolitical uncertainty.
The context: The AICD director sentiment index for the first half of 2026 showed a quarter of directors reported global economic conditions had restricted their investment plans, with 90% expecting business costs to rise alongside supply chain disruptions due to US President Donald Trump’s economic policies.
While productivity remains the top concern, directors also noted that AI, cybersecurity and regulatory burden are continuous challenges.
Even though almost two-thirds of directors reported productivity benefits from AI tools, more than half said their organisations struggle to keep up with the rapid pace.
Inflation and rising interest rates also pose a major challenge for businesses, with concerns jumping to 24%, up from 6% in the previous survey.
What they said: “While productivity concerns still dominate, the fuel and energy crisis unfolding as a consequence of the Middle East conflict will only intensify the challenges being felt in the economy,” AICD chief economist Mark Thirlwell said.
“It’s also important to take account of the effect of rising interest rates. Apart from the issues this creates for households and the flow on effects in the economy, the impact on businesses is hitting particularly hard,” he added.
The source: Australian Institute of Company Directors media release
