Nearly all — 98% — of U.S.-based CEOs anticipate that America will face a recession in 2023, according to The Wall Street Journal, citing data from the Conference Board.
This negative outlook is relatively short-term however with 22% of U.S.-based CEOs predicting gross domestic product (GDP) growth by the midpoint of 2023, while 82% anticipate that recovery will take place before the midpoint of 2024, the Conference Board, a non-profit business research firm, reported Thursday. Chinese, Japanese and Latin American CEOs are all significantly more pessimistic than U.S. and European CEOs about the outlook for GDP growth, with roughly 60% to 70% of CEOs anticipating a recovery by 2024.
“Just about every region with the exception of China believes there’s going to be some kind of economic downturn,” Conference Board chief economist Dana Peterson told the WSJ. “Ninety-eight percent of CEOs in the U.S. think there is going to be a recession—but it’s going to be short and shallow.”
In response to a downturn, U.S. CEOs plan to focus on innovation, digital transformation, high-growth markets and cost cutting measures, according to the Conference Board. European and Japanese CEOs, on the other hand, are more likely than U.S. CEOs to focus on adjusting pricing while Chinese CEOs are more likely to search for new geographic markets.
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— The Conference Board (@Conferenceboard) January 9, 2023
CEOs also displayed a willingness to commit to environmental, social and corporate governance (ESG) principles, with leaders from all regions ranking customers and employees before shareholders and business partners in terms of “stakeholder” prioritization, according to the Conference Board. Nearly 60% of CEOs said that they planned to go ahead with ESG investments even if they faced backlash, a echoing the stance taken recently by BlackRock, the world’s largest asset manager and notable proponent of ESG investing, which has pushed back against political criticisms of its investment strategy from both sides of the political aisle..
In general, CEOs in the financial services sector are more likely to cut costs or implement a hiring freeze or layoffs compared to CEOs in other industries, the Conference Board reported. Goldman Sachs laid off 3,000 employees this week, while Morgan Stanley laid off 1,600 employees in early December, according to the New York Times.
However, this disinterest in cutting jobs may stem from executives’ belief that a downturn will be mild and relatively short, the WSJ reported.
“If the bottom’s really falling out, businesses probably will think about more dramatic measures,” Peterson told the WSJ.
The Conference Board surveyed 1,131 executives and 670 CEOs from companies around the world from mid-November to mid-December 2022. Of these executives, 24% were U.S.-based, with 20% based in Latin America, 16% in Europe, 13% in Japan and 12% in China.
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Republished with permission from Daily Caller News Foundation