Deloitte just took a deep look at the economy and focused on North America. The nation’s impacted are the United States, Canada and Mexico. Over half of the 112 CFOs polled in a survey titled, the Big Four firm’s Q3 CFO Signals, think we’ll be in a recession by early next year.
- *46% think North America will be in a recession in 2023
- *39% think the economy will be in stagflation and not recession
- *15% think we’ll just see moderate inflation
However, Steve Gallucci, Deloitte’s North America leader of the CFO Program said:
* 73% are more concerned with persistent inflation than recession
“The first quarter of 2022 is when we really started to see the pressure on inflation begin to begin to mount and the subsequent moves by the Fed,” Gallucci said. “That, along with some geopolitical challenges both in China as well as in the Ukraine, have really dampened any of the optimism that we saw throughout the pandemic for the most part in terms of companies’ projected revenues, earnings, capital spending, etc.”
The pessimism is peppered with some optimism.
- *29% of the CFOs expect the economy to be better in a year
- *That’s up 18% from the second quarter of this year
- *38% say this is a good time for companies to take more risk
- *That’s up from 35% a quarter ago
“We did see some data points which would indicate that CFOs are beginning to look beyond what would be a pending recession towards potentially starting to think about taking more risk, potentially seeing the economy begin to perform a little bit better in the out quarters,” Gallucci said. “But they certainly continue to be cautious and prudent with things like headcount, operating expenses and the like.”
The CFOs thinking North America will be in recession by 2023 are already making plans.
- *They’re putting operating expenses in check
- *They’re controlling employee numbers
- *They’re putting limits on hiring
- *They’re working to improve productivity
- *They’re hanging onto income to improve liquidity
- *They’re keeping a close eye on expenditures
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