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Survey shows more than half of company executives in America expect a recession within the next few months. Further, business owners are not so optimistic about the markets nowadays.
A majority of CEOs expect inflation to continue and worsen over the next few years. According to the Conference Board measure of CEO sentiment, over 57% of corporate executives concur with the view. In addition, the confidence measure from the board fell into negative territory – from 57% in the first quarter to only 42%. Percentages below 50 are considered negative by the board.
Roger Ferguson, vice chairman of the Business Council and trustee of the Conference Board, said that increased wages amidst inflation had led to corporate executives’ gloomy outlook. Furthermore, the global shortage of supplies and international conflict have contributed to the overall outlook of CEOs regarding the future markets in the US.
The Conference Board also presents other comparisons, these include:
- Only 14% of the surveyed CEOs said that they’d seen improvements in their establishments during the second quarter;
- 61% described current conditions to become worse compared to the 35% from the last survey;
- There was a huge decrease in the number of CEOs seeing improvements in the overall economic conditions of the country, from 50% to 19%;
- Over 60% expect that the conditions will become harsher in the next few months, almost triple from the last quarter’s 23%;
- A lower number of companies will hire in the third quarter of this year, from 66% to 63%;
- 80% experienced challenges in scouting qualified applicants;
- 91%, up from 85%, intend to raise workers’ wages next year
- 38%, lower than the former 48%, will risk spending capital on their businesses;
- 20% believe that stagflation is highly likely – a condition where there is slow growth and increased inflation.
To Ferguson, the recent survey “suggests that this set of circumstances is not likely to get better anytime soon and consequently pressures on the middle line and the bottom line for businesses, pressures on the household sector, pressures at CEO level, and frankly, pressure on the Federal Reserve.”
Inflation worsens in the US due to climate and conflict
As the world approaches summertime, prices for commodities are on an upward trend. Warmer weather in America has caused gas supply to decrease and prices to spike. Analysts predict that if the trend goes on, gas prices in the country will peak at a 25% increase. Additionally, the supply chain has been gravely affected because of the ongoing conflict between Russia and Ukraine, prompting countries to impose bans on several products.
India just recently announced its ban on wheat exports which caused global market supply to plummet. Weather and the conflict in Russia has prompted Indian authorities to pass down the ban. Other countries followed, as well, banning their exports of several raw materials like grain, fertilizer, sunflower oil, and maize.
Things are not looking well in the business landscape of the country. However, authorities are confident that with proper planning and consolidated efforts from departments, they can come up with solutions to tackle the challenges.
