Despite signals from the bond market that the U.S. economy might be headed toward a recession, few corporate chief financial officers are preparing defensive business plans, according to a new survey from the accounting firm Deloitte.
The survey of 158 CFOs, published Wednesday, found that nearly three-quarters of respondents expect a "deceleration of economic activity" by the end of next year, but only 15% expect an "extended decline."
Fewer than 40% of financial chiefs said their company has a "detailed defensive plan."
"The most common downturn responses focused on reducing discretionary spending and controlling headcount," according to the Deloitte report.
The results come as more than three-fourths of business economists have said they expect a recession by 2021, and long-term Treasury-bond yields recently fell below those of short-term U.S. government bills -- a classic warning sign from markets of a coming recession.
A slew of lackluster data have emerged recently on retailing, the labor market, housing and investment spending, reinforcing what many economists already suspected: The stimulus is fading from President Donald Trump's late-2017 tax cuts.
A report Wednesday from the payrolls company Automated Data Processing showed that private companies in the U.S. added jobs in March at the slowest pace in 18 months.
According to the Deloitte survey, many CFOs are also worried by the Trump administration's trade skirmishes and slowing growth in China and Europe.
"Their top policy area for change and/or clarity was U.S.-China trade," Deloitte said. "Infrastructure was a distant second, with immigration third."
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