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Duke Fuqua Survey: Recession Is Coming

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Martin Alvarez Espinar
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To hear chief finance officers tell it, the global economy is heading toward a recession.

That's the top takeaway from the latest CFO Survey, a quarterly survey conducted by Duke University's Fuqua School of Business.

More than half of responding CFOs said they thought the United States economy would be in recession by the end of 2019. Four out of five responding CFOs said the United States economy would be in a recession by the end of 2020. More than half were even more pessimistic, saying the recession would start in less than 12 months.

"The end is near for the near-decade-long burst of global economic growth," said John Graham, a finance professor at Duke's Fuqua School of Business and director of the survey. "The U.S. outlook has declined, and moreover the outlook is even worse in many other parts of the world, which will lead to softer demand for U.S. goods."

In a bit of a contradiction, though, CFOs were still confident about their own firms. More than 71 percent of responding CFOs said they were optimistic about their own firms, the highest of that measure since 2007, according to the survey.

One of the most pressing concerns among CFOs was trade wars with other countries, specifically China. "We buy more stuff from China than they buy from us. But still, China buys enough exports from the U.S. that a slowing China is not good for U.S. growth going forward," said Graham. "Both parties, both China and the U.S. have a great incentive to work this out. The question is, can they find a common middle ground to compromise to?" 

Even if a recession hits, Graham said that own-firm optimism could help blunt the worst edges of a downturn. Domestic buying is still a huge factor in driving the economy forward, and if the U.S. economy keeps a low unemployment rate and consumers continue to increase purchasing, the economy wouldn't hit as rocky of a path, said Graham. He added that because CFOs still planned to hire in the near term, politicians still had time to work things out.

"We might still have about two quarters here where policy makers can avoid a downturn, or at least minimize the negative impact of one," he said.

Jason deBruyn is the WUNC health reporter, a beat he took in 2020. He has been in the WUNC newsroom since 2016.
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