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Most senior finance executives at U.S. businesses believe the U.S. will be in an economic recession by the end of 2020, and 76% predict a recession by mid-2021, according to fourth-quarter results from the Duke University/CFO Global Business Outlook.
But, even with a recession on the horizon, the U.S. firm CFOs lead the world in terms of optimism about the general business environment.
At the company level, firms are taking steps to mitigate the effects of a recession by increasing their cash holdings.
“Hoarding cash and reducing debt are the most obvious tactics to dull the blow of a recession,” said Campbell Harvey, professor at Duke University’s Fuqua School of Business.
Globally, U.S. based firms have the highest degree of optimism about their own company. Capital spending is expected to rise 4.7% and wages are anticipated to grow 4.4%, the largest increases since the first-quarter survey.
Economic uncertainty remains a major concern among CFOs around the world.
The Duke University/CFO Global Business Outlook survey has been conducted for 95 consecutive quarters. The survey period ended Dec. 6 and generated responses from more than 800 CFOs, including nearly 500 in North America, 87 from Asia, 87 from Europe, 139 from Latin America and 40 from Africa.