Even the 45 percent of CEOs who say demand is up since last year join in voicing their continued struggles with the labor market. Patrick Collings, President at Lane Enterprises Holdings, Inc., a large industrial manufacturer, is one of them. His forecast of worsening business conditions is due to “Rising interest rates and continuing labor challenges from rising wages and a lack of qualified labor”.
Jim Nelson, CEO and President of Parr Instrument company agrees that rising interest rates will have some effect. “The federal reserve will overshoot with interest rate policy, and we will see a recession of some magnitude,” he says. He expects future business conditions will drop from 10 out of 10 currently to 8 out of 10 in the future. “Demand will cool going into 2024.”
Inflation and interest rates are the main reasons why 38 percent of CEOs expect business conditions to worsen, now a larger proportion than those who expect conditions to improve or remain unchanged. Still, 34 percent of CEOs expect conditions to improve further, despite current headwinds and maintain predictions that the recession will be mild and short-lived.
“I believe the economy is moving to a flatter line than ever before recorded. More consistent and moderated growth on a smaller incline,” says Christine Nichols, CEO at People Science, a talent acquisition outsourcing and consulting firm. She expects business conditions to steadily improve, rating current conditions at a 6 out of 10, slightly below her 7-out-of-10 outlook for the future.
David Enlo, CEO at Societal CDMO, a large pharmaceutical company, agrees. “Companies are settling in a bit more to the new normal. Lots of decisions that were tabled until things settled down will have to be made soon. This will drive activity and therefore commerce.”