- A survey, conducted by YPO, has revealed what business leaders think a recession sparked by COVID-19 could look like.
- 60% believe the recession will be U-shaped, whilst 22% believe it could be a 'double dip' recession.
- Many fear that their firms won't be able to survive the crisis.
Global business leaders are preparing for a drawn-out U-shaped recession due to the impact of coronavirus and many fear their companies won’t survive the pandemic, a survey of thousands of chief executives showed on Wednesday.
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The pandemic sweeping the world has killed nearly 180,000 people, routed financial markets and could trigger the worst economic meltdown since the 1930s Great Depression.
Around 60% of chief executives are preparing for a U-shaped recovery - a long period between recession and an upturn - compared with 22% who predict a double-dip recession, according to an April 15-19 poll of 3,534 chief executives from 109 countries conducted by YPO, a business leadership network.
The survey found that 11% of chief executives see coronavirus as a risk to the survival of their firm, while a further 40% say the pandemic poses a severe threat.
“We have not seen a crisis like this for over a hundred years, and some household names will not survive,” said Glenn Keys, Executive Chairman of Aspen Medical, a Sydney-based health services firm and YPO member.
Business leaders in the hospitality and restaurant sectors were the most vulnerable with 41% of executives saying their firms were at risk of not surviving, while 30% in aviation and 19% in wholesale and retail sales feared they may go under, the survey found.
There are some beneficiaries, with 10% of sector-specific retail and wholesale leaders as well as heads of production firms in agriculture, factories, mines and utilities reporting a positive impact to their revenue.
However, most chief executives expect things to get worse before they get better.
Almost two-thirds of business leaders forecast a negative impact on earnings to continue for more than a year, while a quarter expect their workforce to be down by more than 20% a year from now.
“Across the globe, the mindset of the business leader is clearly that the world has changed in a very short space of time,” said Scott Mordell, YPO’s chief executive.
“We are in unchartered waters, filled with an unprecedented number of pitfalls, that are challenging some businesses’ very existence.”