And nearly three-quarters (74%) of those CEOs, founders and other high-level execs are very or somewhat confident in the US economy despite the pandemic.
The findings paint a surprisingly bullish view from the C-Suite given the carnage in the US economy and warnings from health experts of a second wave of coronavirus infections. If that optimism translates to fewer layoffs and more investment, it could help limit the economic damage during the crisis.
“They see a path through the crisis,” Mark Weil, CEO of multinational professional services firm TMF Group, said in an interview. “You can argue that sense of fighting spirit is what made the economy great.”
The survey took place between April 17 and April 23 as glimmers of hope emerged in the epic struggle with COVID-19, which has killed more than 100,000 Americans.
‘Markets have no idea’
The hopes from Corporate America and Wall Street for a V-shaped recovery stand in stark contrast with warnings from central bankers of a rocky recovery marked by fits and starts.
“The markets have no idea where the virus is going,” Kashkari told CNN’s Poppy Harlow on Wednesday.
“It started in the spring, went dormant over the summer and then came raging back in the fall,” Kashkari said. “That would be very damaging to the US economy and to the American people.”
Execs expect their companies to rapidly recover
Yet 42% of executives surveyed by TMF Group expect their companies will financially recover within six months. Nearly three-quarters (74%) are expecting a recovery within a year. The survey included a wide range industries, from technology and finance to manufacturing and retail.
One reason for optimism is the unprecedented firepower unleashed by the federal government in response to the economic collapse.
Sixty-one percent of executives surveyed said the financial support to workers and businesses in the United States had a very positive or somewhat positive effect on their companies.
Confidence could lead to virtuous circle
Of course, Corporate America’s bullishness may involve some wishful thinking.
“They may be wrong,” said Weil, the TMF Group CEO. “They could be misunderstanding the systemic effect on job losses and consumer spending. We’ve never done this before. There is nothing to model this against because it’s not a classic credit crisis.”
And the outlook for certain parts of the economy remains gloomy, at least until a vaccine is developed. “Certain sectors are going to hurt,” Weil said. “If you’re in retail, leisure, travel, office space, you’ve got an innate drop in demand.”
Still, much like the rebound on Wall Street, confidence from the C-Suite could have an impact on the real economy, creating a virtuous circle.
CEOs anticipating a rapid recovery in their business and the economy at large may be less likely to lay off workers and slash spending. Some may even decide to hire aggressively and expand into new markets.
Interestingly, 32% of executives surveyed said the pandemic has caused them to accelerate expansion plans inside the United States. Just 22% said they were decelerating domestic expansion plans.
Trade war jitters return
Not surprisingly, executives in the survey said that a weak economy and lower consumer confidence remain the biggest obstacle over to their business over the next two years.
Forty-four percent of executives cited trade uncertainties, including tariffs and trade deals, as one of their biggest obstacles as well.
“If it leads to tariffs and trade restrictions, that has to be unhelpful at a point when the world economy is taking such a hit,” said Weil.
Sixty percent of executives said their companies plan to introduce a home working policy that would give employees the option to work remotely from time to time.
“Many workers don’t want to go back to sitting in an office,” said Weil. “There will be a general shift away from everybody showing up at the same office everyday.”