Company executives are getting more nervous about the state of the U.S. economy, with nearly half now expecting a recession within a year.
Some 48.1% now see negative growth by the second quarter of 2020, according to the latest Duke University/CFO Global Business Outlook survey. The results show that 69% figure a recession will start before the end of next year, which is roughly consistent with the previous survey in April that showed 67% were anticipating a downturn by the third quarter of 2020.
In all, the survey indicated that chief financial officers still believe the economy is weakening and the prospects for their businesses are declining. The reasons for their concerns vary, with some citing tariffs and others listing reasons varying from strong competition to freight costs and credit risks.
“”The numbers may fluctuate slightly, but this is the third consecutive quarter that U.S. CFOs have predicted a 2020 recession,” John Graham, a finance professor at Duke’s Fuqua School of Business and director of the survey, said in a statement. “It’s notable this quarter how strongly recession is being predicted in other parts of the world.”
The results come as many economists believe U.S. growth is weakening from its strong nearly 3% pace in 2018 and the 3.1% gain reported in the first quarter of 2019.
However, the numbers are not consistent with small business sentiment. The National Federal of Independent Business Survey for May rose to 105, just a few points from its record high hit earlier this year.
The results, though, do match other parts of the world, where belief that a recession is coming is running high. In Africa, 85% of CEOs see recession coming, while CFOs in Europe (63%), Asia (57%) and Latin America (52%) see recessions by the second quarter of 2020.
“Trade wars and broad economic uncertainty are hurting the economic outlook,” Graham said.
Business optimism broadly in the U.S. is lagging along with the economic worries, according to the Duke survey. The optimism index, based on a scale of 1 to 100, edged lower to 68.1 from the previous quarter’s 70.4 and a 71 reading a year ago. Economic optimism stood at 65.7, up from 64.6 in the first quarter but down from the 71.1 level at the same point in 2018.