Nearly one in five chief executive officers say they expect the US economy to avoid slipping into a recession, while the majority still anticipate a shallow downturn over the next 12 to 18 months.
(Bloomberg) — Nearly one in five chief executive officers say they expect the US economy to avoid slipping into a recession, while the majority still anticipate a shallow downturn over the next 12 to 18 months.
The Conference Board measure of CEO confidence, in collaboration with the Business Council, climbed 6 points in the third quarter to 48. That said, business leaders remain cautious. Readings below 50 indicate more negative than positive views.
“The gloom that pervaded among CEOs at the start of 2023 has lessened, but most are still treading carefully,” Roger Ferguson, vice chairman of the Business Council and trustee of the Conference Board, said in a statement.
At 17%, the share of CEOs who don’t expect a recession is much improved from the 2% who said so at the end of 2022. Still, eight in 10 said they are preparing for a downturn, with the vast majority expecting it to be brief and shallow.
When asked about wage growth, 74% expect pay to increase by at least 3% over the next year, little changed from second-quarter expectations. By the end of the year, more than half anticipate the Federal Reserve’s benchmark rate will be in a 5%-5.5% range, while nearly a third expect a 5.5%-6% range.
“The competition for talent is fierce: 40% of CEOs expect to ramp up hiring in the next 12 months and another 40% are maintaining the size of their workforce — a sign of labor hoarding in an extremely tight labor market,” Dana Peterson, chief economist at the Conference Board, said in a statement.
A total of 127 CEOs participated in the survey from July 10-24.
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