A survey of chief financial officers (CFOs) conducted by financial services firm Deloitte found that nearly 50% of respondents expect the US economy to enter a recession this year. Additionally, 39% expect the North American economy to enter a period of stagflation by the end of the year.
CFOs’ Views on Recession and the U.S. Economy
Deloitte, one of the Big Four accounting firms, released its third quarter CFO Signals Survey results earlier this week. The survey was conducted August 1-15 and included 112 chief financial officers (CFOs) from the United States, Canada, and Mexico. Deloitte noted that 84% of respondents reported revenues in excess of $1 billion and more than a quarter were from companies with annual revenues in excess of $10 billion, which it described as representing a diverse group of large companies.
According to Deloitte:
46% of CFOs surveyed expect the North American economy to be in recession by the new year.
Financial services firms detail that CFOs are taking a variety of actions to prepare for a recession, including reducing and closely managing operating expenses, controlling personnel, limiting hiring, and increasing productivity.
In addition, many CFOs stated that they are evaluating their customers, services, and products to identify opportunities to help their organizations prepare for the recession; Deloitte further found that:
Just over one-third (39%) of CFOs indicated that they expect the North American economy to enter a period of stagflation by 2023.
“Another 15% are more optimistic, expecting the regional economy to grow with low to moderate inflation by 2023,” the firm explained.
Regarding capital market valuations, 30% of CFOs surveyed this quarter believe U.S. stocks are overvalued. Deloitte noted that “47% say U.S. stocks are neither overvalued nor undervalued, while 24% see them as undervalued.”
Following Fed Chairman Jerome Powell’s speech in Jackson Hole, Wyoming, many are concerned that the Fed’s hawkish stance will push the US economy into recession. In that context, U.S. Senator Elizabeth Warren (Democrat) said the following:” I’m very concerned that the Fed is trying to push this economy into a recession.”
According to an independent survey released last week, 72% of economists surveyed by the National Association for Business Economics expect the U.S. economy to enter a recession by the middle of next year. Nearly one in five economists surveyed (19%) say the U.S. economy is already in a recession. A separate survey conducted last month by Stifel Financial found that 97% of U.S. executives are already preparing for a recession.
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