Young Presidents Association is a fraternity of almost 30,000 chief executives of thousands of businesses in 130 countries. In mid-April, the organization conducted a survey of thousands of CEOs from all over the world about the effects of the COVID-19 crisis. Judging from their responses, things look pretty grim.
Over half of those surveyed believe COVID-19 and the government regulations around it are a “significant threat” to their company. Over a tenth of the total doubt that their business will survive the pandemic and its aftermath, a very grim percentage. By industry, 41 percent of CEOs in hospitality/restaurants, 30 percent in aviation, 19 percent in retail, and 19 percent in education-related businesses report that their companies are on the brink of failure.
Businesses closed by the pandemic have put unemployment claims higher than they’ve ever been before, with several states in the U.S. having either complete collapses of their unemployment system or overburdening leading to long delays in paying benefits. A few states such as Georgia, Florida, Ohio, and Tennessee are planning to begin reopening, often against the advice of the health industry.
Most of the surveyed CEOs are expecting to see slackening profits for at least another year, even if business is able to return to normal by summer. CEOs in the Middle East, North Africa, and South Asia foresee the worst decreases, with predicted profits down as much as 50 percent.
For employment, the predicted numbers are a little better. Fifty-one percent of the surveyed CEOs assume their companies will be back to their current complement of employees by this time next year, or even higher. But most of those CEOs were in the United States. Those in Canada, Australia, the Middle East, and North Africa responded that they predict large reductions in the workforce they could employ in the future.
Panic, both in consumers and in business partners, began impacting businesses before regulations did, and nearly all the CEOs polled predicted that that would continue in waves for some time after all regulations are eased back.
Scott Mordell, the CEO of the Young Presidents Association, said the survey shows a “significant decline in leader sentiment” due to stock volatility, dips in nations’ GDPs, and the results of government stimulus payments.“What’s been amazing is that I expected more variability across regions,” he said. “Everybody sees the same sharp recession and long recovery.”