Recession Inevitable? CEO Confidence Deteriorates Further Heading Into Q4

Is there a recession ahead? The vast majority of respondents to a recent survey of CEOs say “yes” in a rather resounding fashion.

Specifically, The Conference Board’s most recent “Measure of CEO Confidence” survey (which is done in conjunction with The Business Council and gathered answers from 136 top execs between Sept. 19 and Oct. 3) asked respondents to describe the economic conditions they are preparing to face over the next 12-18 months. An overwhelming majority—98 percent—said they were preparing for a U.S. recession, with 99 percent saying they were preparing for an EU recession.

“CEO confidence sunk further to start Q4 and is at its lowest level since the Great Recession,” said Dana M. Peterson, Chief Economist of The Conference Board.

It’s worth noting that some CEOs think the U.S. is already in recession (NPR), but others disagree.

That said, if a recession is either here or in the works, there is at least a glimmer of good news in The Conference Board’s most recent survey: Roger W. Ferguson, Jr., Vice Chairman of The Business Council and Trustee of The Conference Board, said the vast majority expect the U.S. recession to be short and shallow. Beyond that, nearly 7 in 10 believe the EU will enter a deep recession with serious global spillovers.

Also included in the survey, CEOs remained pessimistic about conditions in their own industries to start Q4:

• 15 percent of CEOs reported that conditions in their industries were better compared to six months ago, down from 25 percent.
• 52 percent said conditions in their own industries were worse, up from 48 percent.

Further details in the survey include CEO thoughts on future conditions, employment, an additional differences between the possibilities of a U.S. recession in comparison with an EU recession.

For more information, see The Conference Board’s survey.