The chief executives of America’s top companies are increasingly pessimistic about the US economy with little hope that the economic recession will subside in the near future, according to a report published on Thursday.
They expect a significant global economic slowdown, that the US economic recession will continue into 2010 and that inflation will stay flat through this year and next, a survey by the Business Council and the Conference Board indicated. The recession officially began in December 2007.
The results show “no region of the world is immune to the recession currently underway,” said Jamie Dimon, chief executive of JP Morgan Chase, in an introduction to the survey. “There is no quick end in sight.”
Compared with the last survey, six months ago, 56 per cent of the 71 chief executives polled from some of the biggest US companies think that conditions have worsened substantially. Of those queried, 60 per cent think that business conditions will improve by the last quarter of this year and 40 per cent predict that the recession will last into 2010.
Chief executives are also finding that deteriorating business conditions have spread beyond the US, hitting Europe and Asia particularly hard. The number of executives saying that conditions in China had worsened in the last six months has more than doubled since October.
More than half of chief executives expect the US economy to contract by up to 4 per cent in the first half of this year. The current downturn is “unprecedented” according to 45 per cent of chief executives, and 35 per cent call it as bad or worse than the recession of the early 1980s.
“Perhaps more troubling is the collapse in confidence and trust of our business and financial institutions,” Mr Dimon said.
The report highlighted the gap between how executives view their performance compared with the perceptions of consumers. None of the chief executives said they had done a “very poor” job, while 25 per cent of respondents from a January survey by the Conference Board said performance of corporate management was very poor.
Few executives, however, said they expected to change their strategies. Most plan to cut costs wherever possible, including slashing discretionary spending, freezing hiring and reducing inventories.
Get alerts on World when a new story is published