Almost half (48.1%) of U.S. chief financial officers (CFOs) expect the U.S. economy to be in recession by the second quarter of next year and 69% believe that a recession will have begun by the end of 2020.

That gloomy outlook is slightly better than the one projected last December when 48.6% of CFOs expected a recession by the second quarter of next year and a resounding 82% expected one by the end of the year.

And U.S. CFOs are the optimistic ones. Fully 85% of African CFOs expect a recession by the middle of next year, as do 63% of European CFOs, 57% of Asian CFOs and 52% of Latin American finance chiefs. Exactly half (six of 12) of Canadian CFOs expect a recession by the middle of 2020.

The Duke University Fuqua School of Business reported the data Wednesday in its Global Business Outlook. Survey director John Graham commented, “For the first time in a decade, no region of the world appears to be on solid enough economic footing to be the engine that pulls the global economy upward. Trade wars and broad economic uncertainty are hurting the economic outlook.” From the perspective of the financial chiefs, the U.S. economy is weakening.

Ever cognizant of the bottom line, nearly half of U.S. CFOs (45%) say their biggest concern is the difficulty of attracting and retaining qualified employees. About 37% say that government policies are their biggest concern, and among these, immigration reform is the policy most would like to see changed.

Are U.S. firms developing a conscience? Maybe, but the main reason CFOs are demanding immigration reform is to provide their businesses with a new pool of employees. More than four in five (83%) want the government to expedite approval for green cards that would allow foreign graduate students in science, technology, engineering and math to work in the United States. A similar number (82%) also favor expedited work permits for undergraduates in the same fields.

About two-thirds favor raising the cap on work visas for seasonal and lower-skilled immigrant workers. And 80% want to discard the country’s lottery-based immigration policy and replace it with a merit-based system. No more tired, poor, huddled masses yearning to breathe free are needed — except for yard work and farm labor. For a sampling of CFO comments on this issue, see page 24 of the survey report.

Nearly a quarter of U.S. CFOs are concerned about rising pay. The mean increase expected over the next year compared with the prior 12 months is 3.7%. The mean revenue increase over the same time frame is expected to be nearly 7%, and the mean profit increase is tabbed 6.4%. Health care costs are expected to rise by 6.8%. (And this is what every state spends on public health right now.)

Survey director Graham also noted, “The reduced optimism about the overall U.S. economy likely reflects continued uncertainty about trade policy and weaker global economic growth.” That’s right in line with International Monetary Fund Managing Director Christine Lagarde’s remarks last week concerning rising public debt and the U.S. trade war with China.
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