According to a survey by experts, company executives in America expect lousy market conditions in the next few months. More than half concur a highly likely recession.
When asked, 57% of the total respondents expect inflation to continue and worsen “over the next few years.” This is shown in the survey done by the Conference Board measure of CEO sentiment. Meanwhile, the board’s Measure of CEO Confidence dropped to 42% from the first quarter’s 57%. The board said that percentages below 50 are considered a negative outlook from corporate executives.
Roger Ferguson, vice chairman of the Business Council and trustee of The Conference Board, said that the overall pessimism of executives could be attributed to what’s happening inside and outside the country—for example, increasing wages amid inflation, supply shortages and external conflict, among others.
While many think that things are getting better as restrictions ease, the report says otherwise. Only 14% of CEOs stated that their business has improved during the second quarter of this year. When compared to the last survey, analysts discovered steep differences. For example, 61% reported worse conditions compared with the 35% from the last reading. Meanwhile, 19% saw improvements, down from last time’s 50%, and 60% expect worsening conditions, up from 23%.
Other numbers were also included in the report:
- 63% will be hiring in the quarter 3 (lower than the 66% from the last survey)
- 80% reported facing challenges in finding qualified applicants
- 91% will raise wages by 3% next year (up from the former 85%)
- 38% will undergo capital spending (a drop from the last time’s 48%)
- 20% expect stagflation, a condition where there is slow growth and high inflation
To Ferguson, the survey “suggests that this set of circumstances is not likely to get better anytime soon and consequently pressures on the middle line and the bottom line for businesses, pressures on the household sector, pressures at CEO level, and frankly, pressures on the Federal Reserve.”
Inflation gets worse due to war and climate
In recent happenings, prices of commodities have increased. Gas prices in the US are expected to spike by 25% due to warmer weather. In addition, the conflict between Russia and Ukraine compelled many countries to ban their exports, affecting the global supply chain.
India just banned their wheat exports due to inflation. Wheat exports and shipments of other raw materials like sunflower oil, maize, grains, and fertilizers have been stopped by several countries. Russia has also blocked ships in Ukrainian ports, barring them from exporting goods.
At one glance, things are not looking well in the future. However, authorities are ramping up efforts to curb inflation rates in the country even amid conflict and climate crises. President Biden and other departments concerned have been in several conversations to discuss matters of resolve and action.
Opinions expressed by NY Weekly contributors are their own.
