Introduction to the Economic Outlook

A significant majority of chief financial officers (CFOs) in the United States are expressing deep concern about the economy's future trajectory, with a notable emphasis on the likelihood of a recession by the end of 2025. This sentiment is captured in the latest CNBC CFO Council Survey, which reveals a starkly pessimistic outlook among corporate leaders regarding both sector-specific growth and the broader economic landscape.

Key Findings of the CNBC CFO Survey

The quarterly survey highlights several critical points about CFOs' expectations for the coming months:

• Pessimism Index: An overwhelming 75% of CFOs admit to being somewhat pessimistic about the U.S. economy, reflecting a broader uncertainty about future economic trends.
• Recession Expectations: A considerable 60% of CFOs predict that the economy will enter a recession in the second half of 2025. Another 15% anticipate this downturn to occur in 2026, while a small minority believe no recession will occur.
• Sectoral Outlook: The survey also shed light on which sectors CFOs believe will experience the most significant growth over the next six months. Energy emerged as the top choice, with 20% of respondents favoring it. Technology and healthcare were tied for third place, each garnering 10% of the vote. However, no CFOs expected substantial growth in communication services, consumer discretionary, real estate, or utilities.

Economic Implications and Market Projections

The pessimism among CFOs extends beyond the recession timeline to include projections about market performance. A staggering 90% of CFOs expect the Dow Jones Industrial Average to dip below 40,000 before reaching its next milestone of 50,000. This would effectively erase the gains observed since August last year, underscoring the deep-seated concerns about the market's resilience.

Potential Sector Winners

Despite the overall gloom, some sectors are seen as potential bright spots:

• Energy Sector: Energy remains a top pick for many CFOs, thanks to ongoing global demands and strategic investments in renewable energy sources.
• Healthcare and Technology: Both these sectors have seen continuous innovation and investment, making them less vulnerable to economic downturns compared to others.

Market and Economic Concerns

The projected recession raises several key issues for investors and consumers alike:

• Job Security and Consumer Spending: A recession could lead to reduced consumer confidence and spending, impacting job security across various sectors.
• Business Strategy Adjustments: Companies might need to reassess their business strategies, focusing on cost-cutting measures and diversification to mitigate potential losses.
• Government Policies: Policymakers may face pressure to implement stimulus packages or adjust monetary policies to stabilize the economy.

Conclusion

The CNBC CFO Council Survey paints a somber picture of the economic landscape going into the latter part of 2025. While a mild to moderate recession is anticipated by most, the collective pessimism among CFOs underscores the need for proactive measures to bolster economic resilience. As the global economy navigates this uncertain terrain, stakeholders will closely watch how both policymakers and corporations respond to these challenges.