A survey of U.S. chief financial officers conducted by Duke University’s Fuqua School of Business and CFO magazine showed that optimism over the economy had hit a three-year low with the majority of CFOs expecting a recession before the 2020 presidential election.
More than half of the 225 CFOs surveyed said they were more pessimistic in the third quarter than in the second quarter, with only 12 percent saying they were more optimistic.
“Business optimism has not been this low since September 2016, a time when the unemployment rate was 5 percent,” said John Graham, a finance professor at Duke University’s Fuqua School of Business and director of the survey.
“Optimism is low in all regions of the world, which exacerbates any slowdown occurring in the U.S.”
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CFOs believe the economy is weakening and the prospects for their businesses are declining due to various reasons including tariffs, strong competition, freight costs and credit risk, CNBC reported.
Another survey of global fund managers, conducted by Bank of America Merrill Lynch, showed a similarly pessimistic outlook with 38 percent of 100 global managers expecting a recession next year, the highest net recession risk since August 2009.
“The extreme uncertainty, not just in the U.S. but all around the world, is weighing on companies, and when you get extreme uncertainty there is a tendency to hunker down,” Graham told CNBC.
“Trade wars are a part of that, but only a part. Germany, one of the largest economies in the world, has flat growth. China is always a bit of a mystery, but there is certainly slower growth there as well.”
