Deloitte is a leading financial services firm. It conducted a survey to find that almost 50% of CFOs expect the U.S. to enter recession in this year’s fiscal year. Additionally, 39% anticipate the North American economy will be experiencing stagflation in the next year.
Recession and the US Economy: CFOs Discuss
Deloitte is one of the Big Four accounting firm and published this week the CFO Signals Survey results for the third quarter. The survey was conducted from Aug. 1- 15. It was completed by 112 chief financial officers across America, Canada and Mexico. Deloitte said that these respondents represent large, diverse companies. They noted that 84% reported revenues exceeding $1Billion and that over one quarter are from businesses with more than $10B in annual revenue.
According to Deloitte
46% of CFOs surveyed expect North American to enter recession in the New Year.
Financial services firm explained that CFOs take a number of steps to plan for the recession. They include controlling or closely managing operating costs, decreasing headcount, hiring limits, and increasing productivity.
A number of CFOs also stated that they were analyzing their products, customers and services in order to find opportunities to recession-proof the organizations. Deloitte found that:
A little more than one third of CFOs (39%) stated that they believe the North American economic system will experience stagflation before 2023.
“Another 15% expressed a more optimistic outlook, indicating they expect the region’s economy to be growing with low-to-moderate inflation by 2023,” the firm described.
Regarding capital market assessment, 30% of CFOs believe U.S. equities were overvalued in this quarter’s survey. “47% indicated U.S. equities were neither overvalued nor undervalued, while 24% viewed them as being undervalued,” Deloitte noted.
Many people are worried that the Federal Reserve’s hawkish stance will push the U.S. economy into recession following Fed Chairman Jerome Powell’s speech in Jackson Hole, Wyoming. U.S. Senator Elizabeth Warren (D-MA) who said: “I’m very worried that the Fed is going to tip this economy into recession.”
A poll by the National Association of Business Economics last week found that 72% of economists expect the U.S. to enter recession in the middle of next fiscal year. One in five (18%) of the economists polled said that the U.S. is in recession. Stifel Financial conducted another survey last month and found that 97% US executives were already preparing for a recession.
Let us know your thoughts on the Deloitte survey, and whether you believe that this will lead to the U.S. entering recession. Comment below.
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