Look at the growth trajectory of your organization for each scenario and develop plans for each area of the business accordingly. Examine the impact of each scenario on your company’s bottom line and cash flows. Focus on scenario planning. Make sure you’re analyzing multiple scenarios, including a deep recession even if you project a shallow one.Draw on the agility you’ve built up over the past few years and revisit your old recession playbooks. Take a deep breath. Most leaders are more familiar with economic situations like what we’re in now than they were for the pandemic in 2020.Executives should focus on the potential timing and severity of a recession and plan for it. When entire industries take this approach, they can create the very situation they were hoping to avoid. When companies hunker down in anticipation of an economic downturn, they conserve cash and scale back spending. Recession fears can create a self-fulfilling prophecy.
Add in the respondents who agree, and it jumps to 81%. Thirty-five percent strongly agree that there will be a recession in the next six months. Most executives see an economic downturn coming. As the inflationary period drags on, that is becoming a less viable option however, undercutting companies’ pricing power. Many companies have already passed along price increases to their customers. CMOs are focused on retention and are increasingly personalizing products and services to make their customers less price sensitive. Among the CFOs in our sample, for instance, 33% tell us they’re spending much more time on inflation today compared to a year ago.
The impact of all these factors hits executives differently.
#WORRIED INFLATION ARE OPTIMISM. FREE#
More than three quarters (77%) are mostly or completely confident that they can achieve near-term growth goals, and 76% are confident in their ability to free up working capital. Forty-four percent are hiring in specific areas to drive growth, 42% are planning cost cutting not including headcount reductions and 26% are planning to reduce the number of full-time employees.
In the next 12 to 18 months, executives are balancing cautionary moves with smart investments to drive targeted growth.Eighty-six percent tell us they’re concerned about the Federal Reserve’s tightening cycle, 82% about wage growth not keeping up with inflation and 81% about declining consumer purchasing power. Business leaders also worry about inflation.Four of five (81%) believe a recession is coming within the next six months. The economy is center stage: 90% of executives are concerned (34% moderately and 56% very) about macroeconomic conditions - more than any other issue.How well - and quickly - a company can adapt and transform will help determine who can survive and come out on top. Executives are switching from a mindset of controlling costs to one that is keenly focused on transformation and targeted growth because it’s the only agenda to take a company forward.
#WORRIED INFLATION ARE OPTIMISM. SERIES#
After nearly three years dealing with a series of crises, from the pandemic to geopolitical issues to the current economic storm clouds, executives are becoming seasoned, and many are confident about their ability to respond. This is the lowest figure in a year, following a peak of 9.1% in June.In our third Pulse Survey of 2022, business leaders continue to show optimism despite a backdrop of rapid economic deterioration. That's better than economists' expectations of a 7.9% and 0.6% increase respectively. Has post-Covid inflation peaked in the US? Prices rose 7.7% year-on-year in October, according to figures released by the Labor Bureau, or 0.4% month-on-month. WILLIAM VOLCOV / BRAZIL PHOTO PRESS VIA AFP Subscribers only A man dressed as "Inflation" at the Halloween parade in New York City on October 31, 2022. Inflation in the US was 7.7% year-on-year in October – less than in September and less than predicted – and with Wall Street soaring, some economists are optimistic.īy Arnaud Leparmentier (New York (United States) correspondent) Published on November 11, 2022, at 9:49 am (Paris), updated on November 11, 2022, at 6:45 pm Slowing US inflation gives rise to cautious optimism
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