Recession Number One Fear Among CEOs

CEOs are worried about a recession and expect 2023 to offer little economic growth.

That’s according to a recent survey by the Conference Board, which found that recession concerns were the chief external worry for a group of about 700 chief executive officers and more than 450 C-suite executives.

The survey “also found that most executives don’t think stronger economic growth will return anytime soon,” the board said in a news release. “Fifty-one percent of CEOs worldwide — and 60% of U.S. CEOs — expect a tepid year ahead, with their economies only picking back up by late 2023 or mid-2024.”

The Conference Board said its own base forecast does not constitute a global recession, but it does anticipate some of the lowest economic growth since 2001, setting aside the recession years of 2020 and 2008.

The report showed that recession fears have intensified since last year’s survey, which put a possible recession among executives’ sixth biggest concern, the non-profit think tank said.

Research last year by PYMNTS found that the wealthiest respondents surveyed were most likely to believe a recession was coming but hadn’t yet arrived. But a little less than half of those with an income under $50,000 believe that a recession has already hit, and the country was in the middle of it.

Last week saw a few of America’s biggest banks — including Citi, Bank of America, and JP Morgan — release earnings reports in which they said they were prepared for a mild recession.

And this week will see more than 250 companies release their quarterly earnings, which could include warning signs of a recession, PYMNTS noted Sunday (Jan. 15), citing a Bloomberg News report.

Although analysts had lowered their forecasts recently, their projections about corporate profits for the year are still “materially too high,” Michael Wilson, chief investment officer at Morgan Stanley, told Bloomberg.

Meanwhile, the Conference Board report listed some of the strategies CEOs say they’ll use to deal with a recession, including “accelerating innovation and digital transformation.”

That’s in keeping with recent PYMNTS research showing that small- to medium-sized business (SMB) owners are planning to innovate this year, even as they cut costs and boost productivity to deal with inflation.

Construction companies reported the largest number of incoming innovations, averaging 5.2 technologies to be employed in 2023. Firms in retail trade and personal and consumer services are the least proactive on innovation, planning just three digital implementations on average.