Business Economists See Negative Growth, More Layoffs

(Related: Business Economists See First-Half Recession, Second-Half Rebound)

Their expectations for sales, profit margins and capital spending were the weakest in a decade.

The latest survey included multiple questions about the impact of the COVID-19 pandemic on their companies operations, jobs, cash flow and outlooks. The responses were bleak:

• 63% respondents said their firms have imposed a hiring freeze
• Roughly one-third reported their firms had shut down operations in whole or in part and furloughed employees
• 20% reported their companies had cut wages and 17% laid off workers
• 74% said their outlook for the next three months is “worse,” but that figure topped 80% for all major industry categories, including FIRE (finance, insurance and real estate)
• More than 50% expect the unemployment rate will be 8% or higher a year from now

On a slightly more positive note, three-quarters of respondents said their companies had enough cash on hand to “stay afloat” for longer than six months without federal assistance and 46% of respondents said their firms had not applied for any such assistance. Twenty-three percent didn’t know whether their firms had applied for assistance and 22% said they did.

Sixty-seven percent of respondents expect their firms will resume normal operations within weeks or months.That includes the 28% who anticipate a return to normal operations within three to six months. Thirty-five percent expect the pandemic will lead their firms to have more geographically flexible hiring and working arrangements.

— Related on ThinkAdvisor:

• The CBO’s Devastating Economic Outlook for 2020
• Robert Shiller: Why Investors Are Comparing COVID-19 to the Great Depression