Survey: In 2024, CEOs Are Most Worried About a Recession & Inflation, But Say They're Not Ready

NEW YORK, Jan. 10, 2024 /PRNewswire/ -- As the new year begins, what will keep the world's executives up at night? CEOs in both the United States and globally are bracing for a recession and elevated inflation.

Despite these issues topping their worry list, just 37% of US CEOs say they are prepared for a recession, and 34% are prepared for high inflation, according to a survey from The Conference Board.

Amid elevated inflation and a potential downturn, CEOs' plans to grow profits in 2024 include introducing new products/services, investing in technology, increasing sales via marketing, and entering new markets.

C-Suite Outlook 2024 also reveals that CEOs have thrown up their hands when it comes to getting workers back into the office full time. Just 4% of US CEOs say they will prioritize a full-time return to the office. Consistent with past surveys, attracting and retaining talent remains the number-one internal focus for CEOs globally. 

While the survey reveals that CEOs and boards are fairly well aligned on ESG priorities, with education and economic opportunity topping the list, boards are less confident than executives that their companies are addressing ESG issues effectively, including rising ESG backlash.

Additionally, wars in the Middle East and Ukraine are top of mind, but for America's CEOs the biggest geopolitical threat is at home: the ballooning national debt, which they put as their top geopolitical risk in 2024.

The survey reflects the views of more than 1,200 executives, including 630 CEOs. Participants weighed in on the top business threats and opportunities in 2024. Respondents were primarily from four regions: the United States, Latin America, Japan, and Europe.

Highlights from C-Suite Outlook 2024 include:

RECESSION & INFLATION
The biggest fear for 2024: CEOs expect a recession.

• US CEOs: They rank recession as the #1 external concern for 2024.
• Global CEOs: Recession is also the #1 external concern among executives globally.

Despite cooling in 2023, inflation remains high on the worry list.

• US CEOs: They rank inflation as the #2 external concern for 2024.
• Global CEOs: Inflation is also the #2 external concern among executives globally.

Most CEOs say their companies aren't prepared to navigate a recession or inflation crisis.

• US CEOs: Just 37% say they are prepared to deal with a recession; 34% are prepared for high inflation.
• Global CEOs: Worldwide, just 27% say they are prepared for a recession; 27% say the same for inflation.

BORROWING COSTS
CEO anxiety surges over higher borrowing costs.

• Global CEOs: 
  • Worldwide worry in 2024: CEOs globally rank higher borrowing costs as the #4 external concern for 2024.
  • On their radar in 2023: They ranked it #10 on their annual list of concerns.
  • Little concern in 2022: They ranked it far down, at #22.  
• US CEOs: They rank it as the #6 external concern. It was also top of mind in 2023 (ranked as the #4 concern).

PLANS FOR GROWTH
For short-term profit growth, CEOs are prioritizing new products, new markets, tech investments & marketing.

• Global CEOs: The top tactics are 1) introduce new products/services; 2) increase sales via marketing; 3) enter new markets; and 4) invest in technology.
• US CEOs: American CEOs have similar priorities, citing 1) introduce new products/services; 2) invest in technology; 3) increase sales via marketing; and 4) enter new markets.

For long-term revenue growth, they'll invest in innovation, digital transformation, new business, marketing & talent.

• Global CEOs: Top growth strategies over the next 3-5 years: 1) invest in innovation; 2) new lines of business; 3) digital transformation (including AI); 4) marketing and promotions; and 5) upskill and retain existing talent.
• US CEOs: American CEOs cite the same top-five priorities?and in the same order.

GEOPOLITICS
For America's CEOs, the biggest geopolitical risk is at home: the national debt.

• US CEOs: They rank the national debt and deficits as the #1 geopolitical threat to their operations in 2024.
• Global CEOs: Worldwide, debt is of lesser concern. Tied at #6 on the list of geopolitical threats are the US national debt, and the impact of the national debt and deficits in the countries they operate.

CEOs worldwide are preoccupied by wars and escalating global tensions.

• Global CEOs: Topping their list of geopolitical threats for 2024 is higher energy prices. Other high-priority risks include the potential for an increase in cyberattacks (#2), war in the Middle East (#3), and war in Ukraine (#4).
• US CEOs: Beyond the national debt and deficits (#1), American CEOs' top geopolitical concerns are cyberattacks (#2), war in the Middle East (#3), higher energy prices (#4), and war in Ukraine (#5).

RETURN TO OFFICE & HUMAN CAPITAL
RIP: The battle over returning to the office.

• US CEOs: Just 4% of US CEOs say they will prioritize bringing workers back to the office full time.
• Global CEOs: Similarly, 4% of CEOs worldwide will prioritize a full-time return to the office.

Labor shortages and talent issues factor into the decision to end the return-to-office battle.

• US CEOs: Attracting and retaining talent is the #1 internal priority. Labor shortages are the #7 external priority.
• Global CEOS: Attracting and retaining talent is the #1 internal priority. Labor shortages are the #5 external priority.

ARTIFICIAL INTELLIGENCE
CEOs strongly embrace AI?and fear falling behind more than the technology's dangers.

• CEOs see big ROI in AI: 
  • US CEOs: 92% believe AI will increase productivity; 86% expect it to improve marketing capabilities; 63% anticipate a boost to sales, revenue, and profits.
  • Global CEOs: Worldwide, 91% believe AI will increase productivity; 79% expect it to improve marketing capabilities; 68% anticipate a boost to sales, revenue, and profits. 

Are CEOs underestimating AI's risks?

• Lesser concern about the regulatory burden:
  • US CEOs: Just 45% think AI will increase their regulatory burden, even as the US, EU, and others target AI risks.
  • Global CEOs: Just 37% of CEOs worldwide agree.

ESG
CEOs see the benefits of clean energy, but are not making renewable energy investment a priority.

• US CEOs are the least enthusiastic:
  • US CEOs: 32% say the transition to renewable energy will be significantly positive for their organizations.
  • Global CEOs: Among CEOs globally, the share is 51%.
• The transition to renewable energy is not a high priority for growth: When asked to rank their upcoming plans for growth, CEOs in the US and globally put renewable energy just 20th out of 23 choices.

Boards and CEOs are aligned on ESG priorities, but boards are less confident on how the company is doing.

• Priorities: Education, economic opportunity, and GHG emissions are the top three ESG issues for boards and CEOs.
• Business integration: 64% of directors say ESG is being effectively integrated into business, vs. 76% of CEOs.
• Backlash: 56% of board members say their companies are handling ESG backlash well, vs. 70% of CEOs.

About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what's ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org

SOURCE The Conference Board