What do America’s top CEOs think of our economic recovery? Not much.
According to the Business Roundtable, a non-profit group comprised of CEOs from the nation’s top companies, American chief executives see pandemic-related economic challenges lasting until the end of 2021, perhaps longer.
The recent report included CEO input from Fortune 100 firms like Apple, General Motors, Johnson & Johnson, and others. The majority of respondents thought business conditions would return by the end of 2021, though significant doubters remained. More than a quarter (27 percent to be exact) thought recovery would extend beyond next year.
That’s alarming. When several top CEOs say we’re 18 months away or more from recovery, you can bet the economy and earnings could be in for some turbulence.
These days, when a crisis arises, investors expect quick bounce backs. They know the central banks will spread out some stimulus and things will return to normal soon.
But COVID-19 is a whole different animal. For one, it’s not over. Case levels are at all-time highs. And hospitals are at capacity in some areas.
This creates a real-time crisis for small and medium businesses dealing with rolling shutdowns across the country. Plus, consumer behavior change has shifted. Nobody knows when people will feel safe enough to spend in-person again. If the population remains fearful, many smaller businesses could lack the capital to survive.
Also, the ongoing structural costs of making facilities and supply chains safe is adding to the costs of doing business. How can a restaurant that makes a 7-percent profit before the pandemic supposed to operate on those margins while at 50-percent capacity? It can’t.
COVID-proofing factories, nightclubs, and other businesses may prove impossible, to the detriment of the overall economy.