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Duke Survey: U.S. CFOs Expect Recession By End Of 2020

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(Kitco News) - Chief financial officers think the U.S. is headed for a recession by the end of 2020, according to a survey of firms conducted by Duke's Fuqua School of Business.

The survey, which ended on June 6, showed that 48.1% of U.S. CFOs believe that the country will be in a recession by the second quarter of 2020, while 69% believe that a recession will have begun by the end of 2020.

"The numbers may fluctuate slightly, but this is the third consecutive quarter that U.S. CFOs have predicted a 2020 recession," said John Graham, a finance professor at Duke's business school and director of the survey.

An index on U.S. economic optimism, on a scale of 1 to 100, stood at 65.7 in June, up from 64.6 in March but down from 71.1 a year ago. Another index of business optimism eased to 68.1 in June from 70.4 in June and 71 a year ago.

The study found that the biggest concerns for U.S. businesses were attracting and retaining qualified employees, government policies, economic uncertainty, data security, rising wages and salaries, regulatory requirements, costs of benefits, employee productivity, weak demand for products/services and rising input or commodity prices.

"It's notable this quarter how strongly recession is being predicted in other parts of the world," Graham said.

Eighty-five percent of African CFOs believe their countries will be in recession by the second quarter of 2020. Likewise, 63% of CFOs in Europe, 57% in Asia and 52% in Latin American expect a recession in the same time frame.

"For the first time in a decade, no region of the world appears to be on solid enough economic footing to be the engine that pulls the global economy upward," Graham said. "Trade wars and broad economic uncertainty are hurting the economic outlook."

The survey found that U.S. CFOs are "strongly in favor of more accommodative immigration," according to the report.

Eighty-three percent of respondents support expedited granting of green cards to allow foreign graduate students in science, technology, engineering, and math (STEM) fields to work in the U.S., while 82% favor expedited work permits for STEM undergraduate students.

Also, 79% of CFOs believe the U.S. should drop its lottery-based immigration policy in favor of a merit-based system, while 68% of finance chiefs favor increasing the cap on work visas for seasonal and lower skill immigrant workers.

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