Recession will hit U.S. in 12 to 18 months, say 98% of CEOs: Survey

A full 98% of CEOs are making ready for a U.S. recession within the subsequent 12 to 18 months, and 99% anticipate one to hit the EU, in accordance with the Measure of CEO Confidence survey launched this week by the Convention Board, in collaboration with the Enterprise Council.

“CEOs are actually making ready for near-inevitable recessions in each the US and Europe,” stated Roger W. Ferguson, Jr., Vice Chairman of the Enterprise Council, in an announcement. 

If there’s a brilliant aspect for Individuals, it’s that 85% of the CEOs surveyed anticipate a U.S. recession to be “temporary and shallow,” with restricted international spillover. Against this, solely 31% suppose the identical of an EU recession, which 68% anticipate to be “deep” and with “materials international spillover.” 

“All people likes to forecast recessions, and there will probably be one. It’s only a query of when, and admittedly, how arduous,” Citadel CEO Ken Griffin stated final month on the CNBC Delivering Alpha Investor Summit.

As for when, Jamie Dimon, CEO of JPMorgan Chase, supplied a timeline this week: in six to 9 months. He pointed to the excessive chance the Fed will maintain elevating rates of interest into subsequent yr, mixed with the pandemic aftershocks and the results of the Ukraine warfare.

Dimon stated it was almost inconceivable to foretell whether or not the U.S. recession can be “very gentle” or “fairly arduous.”

“Proper now,” he added, “the U.S. financial system is definitely nonetheless doing nicely. Shoppers have cash.” 

The Commerce Division reported final month that shopper spending, which accounts for over two-thirds of America’s financial exercise, elevated greater than anticipated in August—up 0.4%, in comparison with economists’ expectation of 0.2%.

Recession fears, low enterprise confidence

Whether or not that holds up this vacation season stays to be seen.

Economist Nouriel Roubini, for one, sees a extreme recession beginning within the U.S. on the finish of this yr and lasting presumably although all of 2023.

“It’s not going to be a brief and shallow recession,” he informed Bloomberg final month. “It’s going to be extreme, lengthy, and ugly.”

FedEx CEO Raj Subramaniam stated final month the worldwide financial system is headed for a “worldwide recession,” noting his firm was “seeing quantity decline in each section all over the world” amid a tough quarter. 

He stated FedEx, lengthy thought of a bellwether of world financial progress, would defer hiring, shut 90 workplace places, and cut back capital expenditures by $500 million over the approaching yr.

On an identical notice, Meta CEO Mark Zuckerberg not too long ago introduced his firm, which owns Fb and Instagram, would freeze hiring and reduce prices.

“I had hoped the financial system would have extra clearly stabilized by now, however from what we’re seeing it doesn’t but seem to be it has, so we wish to plan considerably conservatively,” he stated at a weekly Q&A session with workers. 

He’s one among many CEOs cautious of the financial outlook. Within the Convention Board survey, 74% of CEOs stated they anticipate financial circumstances to over the subsequent six months.

“CEO confidence sunk additional to start out This fall and is at its lowest degree because the Nice Recession,” stated Dana M. Peterson, chief economist of the Convention Board, in an announcement. However “regardless of expectations of slower progress, tight labor market circumstances and wage pressures persist, whereas hiring plans remained sturdy,” he added. 

In a KPMG survey of 400 U.S. CEOs launched earlier this month, greater than half stated they’re contemplating lowering their workforces inside the subsequent six months to arrange for a recession. Most Individuals, in the meantime, are additionally apprehensive a few coming recession and the way it will have an effect on them.

Which may make it arduous to be merry this vacation season.

Dimon’s recommendation? “Be ready.” 

Join the Fortune Options e-mail checklist so that you don’t miss our largest options, unique interviews, and investigations.