The CFOs of North America’s largest companies believe the economy is headed for a downturn, but most don’t think a full-blown recession is imminent, according to a new report published on Tuesday.
According to Deloitte quarterly CFO Signals report, 97% of corporate finance chiefs at 159 “influential” North American conglomerates believe that there will be an economic downturn in the US in the next two years.
Fears of a prolonged trade war between the U.S. and China are raising fears for the global economy, and eroding business and consumer confidence.
“A lot of it is point in time, and a lot of it is maybe overly influenced by the uncertainty we’re in right now with the trade and tariff issues,” Sandy Cockrell, Deloitte’s global CFO program leader, told Yahoo Finance in an interview.
“That’s probably a cloud that’s going to be there until there’s more clarity around it,” he added.
Still, some 80% do not believe the downturn will significantly adversely affect the economy, while 24% of those surveyed believe economic conditions in the U.S. will be better in a year.
Fears of a downturn are up a tick from a previous low in the last quarter, when 28 percent of CFOs expected things to get better in a year, Deloitte found.
There’s little doubt about how much of CFO pessimism can be attributed to trade war fears, as well as political gridlock.
As the United States’ relations with trading partners around the world become more uncertain, CFOs are focusing more on growth at home, the survey found.
Finance officers in Canada and Mexico still rank U.S. growth as a high priority, while CFOs in America have become increasingly less concerned about the economic growth of their neighbors to the North and South, according to Deloitte.
Rather than pressure from investors or their budgets being squeezed, though, CFOs’ biggest concern for the future is a dearth of talent. Almost two thirds of those surveyed said that a lack of talent was a constraint.
So, even if clarity comes to the trade war with China, C-suite concerns about the future of work won’t abate any time soon.
“What companies are looking for is the new type of skilled worker who can utilize the tools that exist today in terms of technology that didn’t exist three or four years ago,” said Cockrell. “There’s a tremendous need for more people who have those type of skills in the workplace.”
Calder McHugh is an Associate Editor at Yahoo Finance. Follow him on Twitter: @Calder_McHugh .