81% of CEOs are preparing for a recession—but most expect it to be ‘brief and shallow’

CEO confidence continued to deteriorate in the third quarter, according to a metric compiled by the Conference Board, in collaboration with the Business Council. Fresh out this morning, the Measure of CEO Confidence fell deeper into negative territory than at any time since the beginning of the pandemic—registering 34 this quarter, down from 42 in the second quarter. Anything below 50 indicates more negative than positive responses from CEOs.

But if this is a recession, it’s still a weird one. While 81% of CEOs surveyed say they are preparing for recession over the next 12 to 18 months, the survey also shows that…

…Three-quarters of CEOs say demand for their own company’s products or services has risen or held steady over the past three months.

…50% still expect to expand their workforce over the next 12 months (down from 63% in Q2).

…82% still expect their capital spending to grow or hold steady over the next year (down from 93% in Q2).

…73% continue to report some difficulties in hiring qualified people (down from 80% in Q2).

Former TIAA CEO Roger Ferguson, who is on the boards of both organizations, said that while CEOs “are now prepared for the near inevitability of a U.S. recession…the vast majority expect the downturn to be brief and shallow.” Unclear is whether that “brief and shallow” recession will be sufficient to beat back inflation, which Ferguson says remains the “top challenge” of CEOs.  

You can find out what JPMorgan’s Jamie Dimon, Goldman Sachs’ David Solomon, BlackRock’s Larry Fink, and Deutsche Bank’s Christian Sewing think of recession prospects here.

Alan Murray
@alansmurray
alan.murray@fortune.com

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This edition of CEO Daily was edited by Claire Zillman.