Growing inflation, high fuel costs, and overall geopolitical instability have many business owners wondering if the current tough economic conditions are not just a momentary challenge but a sign of worse to come. Unfortunately, a recent CNBC CFO Council survey adds to the growing chorus of voices predicting a recession in the near future. How companies respond to what experts see ahead will make a critical difference in the long-term health of their business—but the time to act is now if you want to survive.
The Challenges Ahead
The CNBC CFO Council Q2 survey was conducted among 22 chief financial officers at major organizations between May 12 and June 6 of this year. Their responses to the survey displayed a remarkable unanimity on one key point—not one of them believes that the economy will avoid a recession. Sixty-eight percent of responding CFOs believed that the recession would hit in the first half of 2023, an overwhelming majority.
Unsurprisingly, inflation came up as the number one external risk factor cited by the largest number of those surveyed (41%). Nearly one quarter (23%) cited Federal Reserve policy as the biggest risk factor, with 14% identifying supply chain disruptions. An additional 9% noted the Russia-Ukraine war and cyberattacks as their top business risk. While just over half of the CFOs (54%) felt that the Fed will ultimately be able to control inflation, none of them felt it would be possible to avoid a recession.
The survey also showed that CFOs expect interest rates to continue to rise. The 10-year Treasury has already doubled this year, to nearly 3%, and 41% of CFOs expect it to be approaching 4% by the end of 2022, although an equal number believe it won’t get higher than 3.49% by the end of the year. However, some more pessimistic CFOs are bracing for the rate to rise above 4% in that time. CFOs also expected the stock market to take a significant hit, with 77% expecting the Dow Jones Industrial Average to fall below 30,000 before it sets another high, an 18% decline from its high-water mark this year.
Meanwhile, signs of trouble are spreading. The European Central Bank announced this month that it will be raising rates for the first time in over a decade in the face of increasing inflation. Forecasts for continued growth are grim. The Atlanta Federal Reserve’s GDPNow Tracker revised its forecast for growth downward, showing an annualized gain of only 0.9% in Q2. The World Bank has cut its global growth forecast, warning that the road ahead could resemble the “stagflation” seen in the 1970s, and the Organization for Economic Cooperation and Development has also cut its prediction for global growth in 2022. While individual business owners can’t change the economic climate, they can control how their company reacts (or fails to react) to what lies ahead.
Heeding the Warnings
When economic forecasts are bad, it’s not a time to panic—it’s time to prepare. Even in challenging markets and periods of recession, there are opportunities to be had and ways to soften the negative impact, but only for businesses that take a clear look at the facts and strategize in advance. If you’re uncertain about what 2023 holds for your business, contact Iffel International now. The next six months are a critical period for restructuring and mitigating risk around SEO2Sales to capture opportunities during a down market and ensure the long-term health of your business.
The last few years have proven what our existing clients already knew—Iffel International is your expert resource for navigating difficult economic changes. Throughout the pandemic, we helped our clients with timely advice and data-driven conclusions, implementing effective strategies focused on delivering the sales and leads they needed. Our strength is keeping your business moving forward even through economic headwinds.
Your competitors aren’t waiting to make plans to deal with a recession, and neither should you. For your business to survive and ultimately thrive when the economy turns around, you need to have a game plan in place before the recession hits. Don’t hand your rivals a head start in a tough market. Contact Iffel International here to get started on your recession plan for online marketing today.
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