CEOs ranked a potential recession as their No. 3 concern in 2018, listing cyberattacks as their top fear in the annual survey conducted by nonprofit business research organization The Conference Board that received responses from 750 CEOs and 800 C-suite level executives around the world, including 123 U.S. CEOs, and 114 other U.S. C-Suite executives.
"In 2019, recession risk in the United States was ranked as the third biggest challenge, after cybersecurity and the threat of new competitors," Conference Board Cheif Economist Bart van Ark told FOX Business. "The higher 2020 ranking of recession risk reflects more widespread concerns about the global slowdown as it evolved during 2019."
"Global GDP growth slowed to 2.3 percent, as much as 0.7 percentage point lower than the year before. Still, that’s not a recession – not in the US nor globally. ... The Conference Board forecasts global growth to modestly recover to 2.5 percent, and U.S. growth might stabilize around 2 percent or a little more," he added.
Chuck Mitchell, Conference Board executive director of Knowledge, Content and Quality, said the results should "raise a warning flag" in a statement.
"This should raise a warning flag about possible complacency, considering the current speed of disruption," he said. "The truth is that today, companies no longer enjoy the luxury of a decades-long lead time to adapt to the digital revolution."
The results highlight growing fears of an economic slump amid foreign trade tensions, as well as growing confidence in cybersecurity, which ranked sixth in U.S. CEOs' top concerns this year. The No. 2 fear for CEOs in 2020 is global political instability, and the No. 3 fear is uncertainty regarding global trade, according to the survey.
"Budgets to strengthen cybersecurity have been ramped up globally even though the companies often still lack a strategy to deal with the financial and reputational impact of a cyberattack or a data breach," van Ark said.
A potential recession tied with uncertainty regarding global trade for the top concern among Chinese CEOs, revealing that U.S. and Chinese executives share similar concerns as political trade decisions impact businesses in both countries.
"The ongoing concerns about recession risk among business leaders reflect the slowing economy of the past year and the uncertainties about the outcome of the trade disputes and other policy concerns," van Ark said.
Trade optimism had gone up, however, since President Trump announced that he would be signing phase one of a trade deal with China in January, which will include the removal of tariffs on certain goods from the U.S. and China.
U.S. equity markets won back their early losses in response to the president's tweet.
"Given a slightly better outlook for the global economy and an easing of trade tensions, we anticipate that a drumbeat of negative sentiment – which can become a self-fulling prophecy – can be avoided, and that we will see more confidence about business prospects in 2020," van Ark added.
The partial trade deal, which was agreed to on Dec. 12, calls for Beijing to purchase $200 billion worth of U.S. products over the next two years in addition to protecting against intellectual property theft and technology transfer. In return, the U.S. has agreed to reduce its tariffs on Chinese goods but will still levy duties against $380 billion of those products.
Additionally, unemployment numbers are hovering near record lows.
International trade conditions, strict monetary policy and industry-specific or regional factors are among three factors that could lead to a recession this year, according to Forbes.
Jonathan Garber contributed to this report.