CEOs fear recession in the near future

No matter the day, week, or year, if you check out business headlines, there’s a good chance that you’ll read that the sky is falling. Thing is, one day, the doomsayers will eventually get it right. With 90 percent of chief executive officers predicting a recession, their fears may seem plausible.

Consulting firm KPMG conducted a survey quizzing 40 leaders at major American companies regarding their outlook. The results are that 91 percent of CEOs believe that a recession will occur within the next 12 months. Worse yet, many fear the economy may take a long time to recover.

Unemployment goes up in a recession because there is a decline in trade and business activity.

Unfortunately, such dour sentiments may morph into a self-fulfilling prophecy. Roughly half of the CEOs reported that they were planning layoffs. If business leaders move to position their organizations for a recession, such as instituting layoffs or reducing investments, it could create a drag on the economy. This, in turn, could generate a self-sustaining feedback loop with a souring economy forcing companies to take even more drastic measures.

There’s some good news, however. Many business leaders believe their company is now better positioned to deal with an economic contraction. Further, many company leaders hold a positive long-term view.