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: 91 percent of CEOs believe that a recession will set in within the next 12 months. Worse yet, many fear it may take a long time for the economy 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 CEOs reported that they are planning layoffs. If business leaders move to position their organizations for a recession, such as instituting layoffs or reducing investments, it could create 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.
Rick Good spent ten years in the newspaper business, including with The News & Observer (Raleigh, NC) and The Greenville News (Greenville, SC). He co-wrote, with Melinda Coleman, Rutledge to Riley: Governors of South Carolina, 1776–Present (Published by The Greenville News), and is the author of Mind Games Trivia #1 (Amazon). He has recently spent 15 years creating original trivia content through Sounds Good Mobile Entertainment and continues that with his new company, SGME Software. He edits The Smart Reader’s money, real estate, and business coverage.
