Financial services firm Deloitte conducted a survey of chief financial officers (CFOs) and found that nearly 50% of respondents expect the US economy to be in recession this year. Furthermore, 39% expect the North American economy to be in a period of stagnation by the end of the year.
Chief Financial Officer on Recession and the US Economy
Deloitte, one of the big four accounting firms, published the results of its CFO Signals survey for the third quarter earlier this week. The survey, conducted between August 1 and 15, involved 112 chief financial officers (CFOs) from the US, Canada and Mexico. Deloitte explained that they represent diverse large companies, noting that 84% of respondents reported revenues exceeding $1 billion and more than one-quarter are from companies with more than $10 billion in annual revenue.
According to Deloitte:
Forty-six percent of CFOs surveyed expect the North American economy to slip into recession by the new year.
The financial services firm elaborated that CFOs are taking a number of steps to prepare for the recession, including reducing or closely managing operating expenses, controlling the workforce, limiting hiring, and increasing productivity. .
In addition, several CFOs said they are evaluating their customers, services and products to identify opportunities to help their organizations survive the downturn. Deloitte additionally found:
A little over a third of CFOs (39%) said they expect the North American economy to be in a period of stagnation by 2023.
“Another 15% expressed a more optimistic outlook, indicating that they expect the region’s economy to continue growing with low-to-moderate inflation by 2023,” the firm described.
With regard to capital market valuations, 30% of CFOs believe that US equities were overvalued in this quarter’s survey. “47% indicated that US equities were neither overvalued nor undervalued, while 24% viewed them as undervalued,” Deloitte said.
After Fed Chairman Jerome Powell’s speech in Jackson Hole, Wyoming, many are concerned that the Federal Reserve’s harsh stance will push the US economy into recession. Among them is US Senator Elizabeth Warren (D-MA) who said: “I am very concerned that the Fed is going to put this economy into recession.”
An independent poll published last week showed that 72% of economists surveyed by the National Association of Business Economics expect the US economy to hit a recession by the middle of next year. Nearly one in five (19%) of economists surveyed said the US economy was already going through a recession. Another survey conducted by Stifel Financial last month showed that 97% of US executives are already prepared for a recession.
What do you think about this Deloitte survey and the US economy going into recession this year? Let us know in the comments section below.
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