A majority of top U.S. executives believe the American economy is already in a recession or will slide into one within six months, according to a survey released March 6. Most executives polled also said that their companies will not be able to avoid the effects of a recession, according to a survey commissioned by The Boston Consulting Group (BCG).
A total 53% of executives believe the economy is already in a recession, which is typically marked by two straight quarters of declining economic activity, or will be in one within six months. A much larger majority, 95%, who said a recession is likely believe that their companies will not be able to avoid the chill winds of an economic slump.
A growing number of private economists also believe a lengthy housing market slump, a broad credit squeeze, slowing job growth and skyrocketing oil prices have already or will soon tip the world's biggest economy into a recession.
U.S. economic growth slowed sharply to a 0.6% annualized pace in the fourth quarter of last year, compared with a blistering 4.9% in the prior quarter.
Hal Sirkin, the global leader of BCG's Operations practice, said there could be a silver lining to the anticipated economic malaise. "In a recession, everyone feels short-term pain. But companies that successfully approach a recession as an opportunity have the potential to realize long-term gain," he said.
The business consultant said companies that prepare themselves for leaner economic times can ride out a downturn and use it to "leapfrog" rival firms. A majority of executives said a recession could offer new business opportunities while a minority said it may spur a bout of merger and acquisition activity.
Copyright Agence France-Presse, 2008