Bosses bracing for cuts, freezes
THE country’s chief executives are preparing for a global recession next year, planning for hiring freezes and lay-offs, according to a survey conducted by KPMG.
The professional services firm’s latest chief executive outlook shows 78 per cent of chief executives surveyed were preparing for a downturn by planning or implementing a hiring freeze.
Most of these chief executives – 64 per cent – were also considering lay-offs.
KPMG Australia chief executive Andrew Yates said the survey was the first time in the past eight years that chief executives had been expecting a downturn.
He said the survey had shown there was in fact now an expectation among business leaders in Australia that there would indeed be “short mild recession” over the next year.
“There is quite a different sentiment in this year’s survey with a downturn being anticipated,” he said.
He said confidence had been hit by the Covid-19 pandemic, rising inflation and the war in Ukraine.
“It is not surprising that CEOS’ normal optimism has taken a bit of a hit,” he said.
“There is a short-term unease, with a large percentage of respondents saying they had taken steps to prepare for a downturn. Australia is better placed than most countries, so the probability of a recession here is lower than elsewhere.
“But there is still a risk that domestic demand contracts, rather than just grows at a slower pace,” Mr Yates said.
Some 80 per cent of Australian chief executives surveyed told KPMG that they planned to increase their prices over the next six months to cover cost rises.