C-suite executives are poised to reduce expenses as the ongoing banking crisis requires a toll on demand and future financial prospects.

A new survey released by BCG on Friday identified that about 75% of 759 worldwide C-suite executives see macroeconomic uncertainty as the largest challenge facing their enterprises in 2023. That uncertainty has also been exacerbated by the current failures of prominent banks Silicon Valley Bank, Signature Bank (SBNI) and Credit Suisse (CS).

“The current failure of Silicon Valley Bank and other folks shows how challenging it is for executives to predict/anticipate the future, even in the close to term,” the report stated. “That is why it really is essential for C-suite leaders to continue to strengthen efforts to minimize expenses and construct resilience whilst driving extended-term development.”

Swiss National Bank (SNB) President Thomas Jordan (R) heads to the Swiss Federal Ministry of Finance for talks on the Credit Suisse crisis in Bern on March 19, 2023. (Photo by FABRICE COFFRINI/AFP through Getty Photos)

Firms are locked and loaded to shield their earnings against a volatile backdrop, the survey identified.

“Regardless of area, price reduction is a essential priority, with a concentrate on efficiency, rather than pure price reduction,” the authors wrote. In North America, executives are specifically focused on cutting talent and locating other approaches to raise productivity.

The ban on hiring and spending comes as Wall Street starts to warn of the fallout from current bank failures.

The likelihood of a US recession is increasing once again for the 1st time due to the fact November 2022, according to the most up-to-date survey by fund manager BofA released this week. About 42% of fund managers surveyed see a recession taking place in the subsequent 12 months, up from 24% in February.

Goldman Sachs chief economist Jan Hatzius noted final week that he sees a 35% possibility of a US recession in the subsequent 12 months, up from 25% previously. The raise in odds reflects “elevated close to-term uncertainty” about the financial effects of strain on tiny banks.

Hatcius also reduce its 2023 GDP forecast by .three percentage points to 1.two%.

“His [a recession] it really is not a certain issue,” Moody’s Analytics chief economist Mark Zandi told Yahoo Finance Reside. “I imply, we will need a tiny bit of luck. We must be capable to get by with no an financial downturn. It will not be uncomplicated. I am not saying it will not be definitely bumpy and uncomfortable. At occasions like now, it really is really uncomfortable. But I assume we’ll be capable to get via.”

The story continues

Brian Sozzi is the executive editor of Yahoo Finance. Adhere to Sozi on Twitter @BrianSozzi and on LinkedIn. Tips on the banking crisis? E-mail brian.sozzi@iahoofinance.com

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