A new International Data Corporation (IDC) survey of senior business executives from around the world found that 59% believe there will be a recession in the coming year.
Moreover, nearly 30% of those who believe a recession will occur argued a recession is already on. Another 26% expect a recession to begin in the second half of 2022.
The IDC report, IDC's Worldwide C-Suite Survey 2022 Recession Sentiments, summarises the results of IDC's 2022 C-Suite Survey.
The analysis is done on questions regarding a potential recession. It is based on an international data set of 858 respondents, including 311 from North America, 300 EMEA [Europe, the Middle East, and Africa], and 247 Asia Pacific (APAC).
This report explicitly examines the C-Suite recession sentiments on the likelihood, timing, duration, and impact on IT budgets.
"There are many factors contributing to slower growth, including persistent inflation, rising interest rates, ongoing supply chain issues, a potential energy crisis in Europe, and the conflict in Ukraine. Hence it's not surprising that the majority of executives believe a recession is imminent," says Tony Olvet, Group Vice President, Worldwide C-Suite and Canadian Future Enterprise Research at IDC.
"CEOs in particular need to guide their organisations through periods of economic slowdown without losing sight of long-term growth objectives, and for the vast majority of CEOs that requires a digital-first strategy."
While the majority of executives in each of the geographic regions surveyed felt that a recession is likely in the next 12 months, the most robust response came from EMEA. Nearly three-quarters of C-suite respondents expect a recession in the coming year in these regions.
However, a similar share of EMEA executives believes the recession won't begin until the first half of 2023.
In comparison, nearly half of North American respondents believe we are already in a recession. While 44% of APAC respondents believe the recession will begin in the second half of 2022.
Regarding duration, two-thirds of the respondents believe the recession will last one year or longer.
While many executives in both EMEA and APAC believe this will be the case, nearly 60% of North American executives believe the recession may last just two or three quarters.
Despite their expectations of a recession, more than one-third of the survey respondents predicted they would increase their IT budgets during this time.
EMEA respondents had the most bullish outlook for IT budgets, with nearly two-thirds expecting budget increases compared to about a quarter of respondents in North America and APAC.
"In today’s macroeconomic environment, there are indicators of slow growth and sentiments from business executives that express concern for a potential recession. No one can confidently predict the future, but everyone can learn from the past," adds Teodora Siman, Research Manager, C-Suite Tech Agenda at IDC.
"As recently as 2020, we saw organisations that invested in technology and digital business models emerge from the pandemic ahead of their competitors. Investing in technology before an economic downturn can help uncover inefficiencies in processes and increase business agility, preparing an organisation to handle new risks in the market."