Recession fears surge among CEOs, survey suggests

Most top executives say they think a recession is looming or already here, according to a new survey, reflecting a rapid deterioration of the economic outlook among business leaders. More than 60% of CEOs expect a recession in their geographic region in the next 12 to 18 months, according to a survey of 750 CEOs and other C-suite executives released Friday by the Conference Board, a business research firm. An additional 15% think the region of the world where their company operates is already in a recession. In late 2021, 22% of CEOs surveyed by the firm reported seeing recession risk. That total was down from 39% a year earlier. The survey, which is based on data collected in May, was conducted before the Federal Reserve on Wednesday approved its largest interest-rate increase since 1994 and Fed officials said it was becoming more difficult to tame inflation while avoiding a recession.

“We need to be prepared for tougher times,” said Ilham Kadri, CEO of Solvay SA, a Brussels-based chemical maker, who added that rising inflation could hurt demand for products. The usual sources of difficulty in today’s economy are driving growing fears of a recession, executives say. The fallout from Russia’s invasion of Ukraine, supply-chain challenges and Covid-19 lockdowns in China, not to mention rising interest rates, are all “creating some uncertainty in terms of the outlook,” said Paul Knopp, chair and CEO of accounting and advisory firm KPMG U.S. Higher energy prices are a particular concern, some executives say, with rising transportation costs making it more expensive to produce goods. At heating and air-conditioning manufacturer Johnson Controls International PLC, the company has continued to see robust demand for its products, said CEO George Oliver, who added that the construction industry still looked healthy. But he said energy prices represent a broader economic threat. “Any time you see energy costs—and the impact that has on cost of goods, and transportation—those fundamentals, obviously, from an economic standpoint, matter,” Mr. Oliver said.