Almost eight out of ten big bosses, from North America to Europe via Asia and Latin America, expect a recession in their area of activity, with some believing that it is already raging, according to a Conference Board survey released Friday.
The US Institute for Economic Research surveyed 750 CEOs and senior executives. Among them, some 61% believe that a recession is imminent, at best by the end of 2023, and a further 15% believe that the slowdown is already underway. A recession is defined by two quarters of negative evolution of the gross domestic product.
The survey was carried out between May 10 and 24, i.e. before the decision of the American central bank (Fed) to drastically raise rates by 0.75 percentage points, which caused the stock market, fearing a recession.
“Historically high energy prices, further supply chain disruptions, heightened geopolitical risks and eroding consumer confidence are all putting downward pressure on global growth,” said Dana Peterson, Chief Economist. of the Conference Board. “This is in addition to the confinements in China and the cascades of consequences of the war in Ukraine”, he continues.
Inflation worries leaders
Inflation is at the forefront of leaders’ concerns alongside the fear of cyber retaliation after sanctions against Russia. Faced with the rise in prices and the volatility of energy costs, companies have two priority strategies: first, they transfer these additional costs to consumers by increasing their final prices, as recognized by 51% of companies.
Then they cut their production costs, which 47% of companies do, according to the survey. Another fear that has emerged in the wake of Russia’s invasion of Ukraine and subsequent Western sanctions is that Moscow will retaliate through cyberattacks. No less than 90% of leaders now fear hacking from Russia, and 44% of them say they are “very worried”.