Most CFOs think an economic downturn is coming next year: Here's why

As Wall Street watches for signs of a global recession, most American CFOs agree: An economic slowdown is looming on the horizon.

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Over the summer, CFOs’ views on the trajectory of the North American and European economies hit a six-year low, according to a new study conducted by the Deloitte Global CFO Program. A staggering 75 percent of CFOs surveyed said they believe there will be a U.S. growth slowdown by the end of 2020.

In forecasting a slowdown, CFOs cited uncertainties surrounding the possibility of a no-deal Brexit, a possible recession in Europe and the year-long U.S.-China trade war — which has culminated in billions of dollars in tariffs, with no end in sight. Accordingly, their expectations for revenue, earnings and hiring waned.

Other worrisome developments included the inversion of the spread between two-year and 10-year Treasury yields, a rate cut by the Federal Reserve (the first in more than a decade) and moderate growth in the U.S. that was stunted by a lack of investment and low exports.

“These threats and their potential impact on the economy have CFOs wary,”  Sandy Cockrell, Deloitte Global CFO program leader, told Fox Business.

Still, it’s not all bad news. Most CFOs -- 80 percent -- said they expected any downturn to be mild, compared to 15 percent predicting an extended decline in economic activity.

“It’s also important to remember that U.S. growth was moderate and consumer confidence remains high, so we’re not seeing these concerns impact the consumer directly—at least not yet,” Cockrell said.

CFOs have been forecasting an economic recession for most of the year, as early as December. As recently as June, 48.1 percent of CFOs in the U.S. were betting the nation would enter a recession by the second quarter of 2020; about 69 percent believe a recession would start by the end of next year, according to the Duke University and CFO Global Business Outlook.