40% of Senior Executives See Recession Lasting into 2010

A survey of CEOs released Thursday showed that most company executives don't expect a recovery in the U.S. economy until at least the end of the year, with 40% of the respondents saying the recession will last until 2010.

The semiannual survey conducted by The Business Council, an organization comprised of more than 100 CEOs across different industries, showed that the economic turmoil is seen as widespread across the U.S., with most regions reporting deteriorating conditions since October, when the last survey was conducted.

According to CNN, the council's index of U.S. business confidence fell to 25.9, much lower than the 32.1 reported in October. A reading below 50 indicates negative expectations.

Nine out of 10 respondents felt conditions deteriorated in every other region, with 50% of the respondents expecting things to get worse within their own industry in the months ahead.

The CEOs surveyed also reported that inflation pressures could mount despite the fall in business demand, with only 7% of respondents seeing a fall in prices and 45% expecting "more inflation than in the past."

The majority of the CEOs surveyed see U.S. GDP falling by an average of 3% in 2009, with four out of 10 respondents expecting a recessionary environment into 2010.

Regarding the housing market, 75% of the respondents see further downside as economic conditions continue to deteriorate.

As for their company's own profitability, most of the CEOs expect profits to decline in 2009, and the majority sees workforce reduction as their primary strategy to weather the economic turmoil.

The Business Council is a voluntary association of business leaders whose members include CEOs from a vast array of industries including Caterpillar Inc, JPMorgan Chase & Co, Exxon Mobil Corporation, General Motors Corporation and the Boeing Company, among many others.

Written by CEP News Staff and edited by Sarah Sussman
©CEP News Ltd. 2009