Survey: 2019 recession is looking more likely
Trade tensions, slowing European economies seen as warning signs.
An economic downturn is looking more likely in 2019, according to a global survey of chief financial officers.
Nearly half of the U.S. executives surveyed in the Duke University Fuqua School of Business quarterly survey now believe that the U.S. will enter a recession by the end of next year.
Even more — 82 percent — think that a recession will happen by the end of 2020.
The negative sentiment comes off the back of nearly a decade of growth in the U.S. and generational lows in unemployment. But there have been some warning signs on the horizon, said John Graham, a finance professor at the Fuqua School of Business, in a phone interview.
“There have certainly been (negative) things happening,” said Graham, noting the trade war between the U.S. and China as well as slowdowns in European economies, “but somehow the U.S. economy has been going like a steam engine.
“I think we have been trending (down), but I was still interested and surprised that chief financial officers would think by this time next year there would be a recession.”
The survey was of 500 CFOs, including 226 in the United States.
One of the biggest concerns beyond economic uncertainty, according to surveyed CFOs, is how difficult it has become to hire new employees with the U.S. unemployment rate at 3.7 percent — its lowest level since 1969.
“Right now it has become hard to hire people with skills and you can’t keep expanding without the employees there,” Graham said. “We have reached full employment, and that is great thing for many people that didn’t have a job two years ago and now have jobs.”
But, when you reach the limits of full employment it puts a ceiling on growth, Graham said.
CFOs aren’t predicting layoffs, however, just hiring at a
slower pace, he added, not- ing that if there is a recession it shouldn’t be a severe one.
Mark Vitner, a senior economist at Wells Fargo in Charlotte, said in a phone interview that the chances of a recession have indeed crept up, though the CFO survey wasn’t too worrisome in his eyes.
He is still predic t ing growth next year between 2 percent and 2.5 percent — and if a trade resolution is made with China, for exam- ple, the negative narrative could change.
“I would put (the odds of a recession) closer to 30 percent, and I would widen the window to 18 months,” Vitner said. “The risks have increased and it doesn’t surprise me that CFOs, who tend to be more cautious than the population at large, are becoming a little more concerns me the most going concerned.” into 2019 is cyclical things
Vitner isn’t the only econ- like housing, motor vehicle omist with concerns. At a sales, capital spending for roundtable of chief execu- equipment and commertive officers in Charlotte, cial construction are slowN.C., earlier this week, ing down,” Vitner said. Diane Swonk, chief econBut, those are areas where omist at the consulting firm North Carolina is strong, Grant Thornton, predicted he added. a downturn next year, cit“In North Carolina, which ing an aging labor market. has a very diverse econ-
“If immigration contin- omy, we have had a litues to slow,” Swonk said, tle bit stronger growth in according to the Observer, housing than the rest of the “we will have a contracnation because of popula- tion in the labor force by tion growth,” Vitner said. 2020 because retiring baby “But, you really can’t say boomers (are) not being we are over built by any replaced by enough incom- stretch of the imagination. ing workers.” We don’t really have a lot
But both Vitner and Graof raw land in the pipeline. ham said that if a recession “That has typically been occurs, North Carolina’s the Achilles’ heel for North economy is likely to fair betCarolina,” he said. “When ter than most, because of a recession has unexpectits population growth and edly popped up (in the past), diverse population. the banks were left holding
“In the U.S., things are a lot of real estate that lost slow i ng after two very value and then they’ve had strong quarters, and what to curtail lending in other
The fire suppression provided to residents of Center- ville/Washington Township has earned one of the two highest ratings issued by the Insurance Services Office, the leading supplier of data and analytics for the prop- erty and casualty insurance industry.
The Public Protection Classification rating increased from a Class 3 to a Class 2, a designation earned by 4 percent of those evaluated. ISO’s Fire Suppression Rating Schedule provides 10 classi- fications, with a 1 being the highest.
“These ratings are important to both communities and fire departments,” said Chief Bill Gaul. “Most insurers use ISO classifications for under- writing and calculating premiums for residential, commercial and industrial prop- erties. Communities with better scores may get lower insurance prices. This also provides fire departments with a benchmark that we can use when planning and budgeting for fire protection improvements.”
The schedule considers three main areas of a com- munity’s fire suppression system. The fire department constitutes 50 percent of the score, followed by the water supply system at 40 percent and emergency communications at 10 percent. Extra points are given for commu- nity risk reduction efforts.
The Joint Commission has awarded the “Advanced Total parts of the economy.” Hip and Knee Replacement”
Graham said North Caroli- certification to the Dayton na’s diverse economy could VA Medical Center. The also shield it from the worst Dayton VAMC is the only of a recession. hospital in the Dayton region
“We could have a situa— and the only VA Medical tion where some places in Center in the country — to the country do well and oth- receive this advanced cer- ers do not,” Graham said. tification.
“Right now North CaroliThis is the second time the na’s doing well and I don’t Dayton VAMC has received think it will get bad in the this certification by The Joint short run . ... . It is still a Commission, the leading more attractive place to do accreditor of health care business than places like organizations in the United Connecticut and Illinois.” States. According to The Joint
It could even vary from Commission, veterans seen place to place in North Car- at the Dayton VAMC can olina, especially between expect high-quality, comthe state’s thriving urban prehensive care; fewer com- centers and its rural areas. plications; and a decreased
“The unfortunate part of it length of inpatient stay. is, if we’re going into a recesThe certification is granted sion, the rural and smaller to facilities that demonstrate metro areas (in North Car- proven success utilizing the olina) have only recently whole care continuum, felt gains” in employment focusing on areas such as and manufacturing, Vitner care transitions, quality consaid. “There would be frus- tinuity, pain management, tration that they were late quality of life levels, patient to the party.” education and activities of daily living. These performance measures were developed by experts in the fields of orthopedic surgery, anesthesia, rehabilitative medicine, internal medicine, physical therapy, perioperative nursing, social work and joint program administration.
For more information about the total hip and knee replacement certification, go to https://www.jointcommission.org/performance_measures_for_advanced_certification_in_total_hip_and_total_ knee_replacement/.
Local business owner Alfredo Jiménez has been honored with a 2018 Latino Military Service of Distinction Award by t he Ohio Latino Affairs Commission. Jiménez, a veteran of the U.S. Air Force, is the owner and president of Absolute Vacuum Corp. LLC, a certified veteran-owned minority small business. Absolute Vacuum Corp., founded by Jiménez in 2011, is a leading provider of vacuum pump repair and maintenance in the Tri-State area.
Jiménez, who resides in Huber Heights, was honored for his achievement at gala last month. A letter from Sen. Rob Portman congratulating him reads, “I applaud your leadership and service to the Hispanic community through your volunteerism,” and goes on to say, “Our Nation is forever indebted” to Jiménez for his military service.
Jiménez learn e d the trade of v a cuum p ump repair while working for the Department of Defense, eventually at Wright-Patterson Air Force Base. After honing his skills for 11 years, Jiménez realized the great need for a company to service vacuum pumps in the Dayton area. In 2011, he founded Absolute Vacuum Corp., where other businesses in need of vacuum pump repair can come for high quality services and c ost-effective solutions for vacuum pump repair. AVC is set apart by its very popular “loaner program,” where companies have the option to rent a replacement pump while theirs is being repaired.
To learn m ore about Alfredo Jiménez, his community involvement and the Latino Military Service of Distinction Award, visit Absolute Vacuum Corp.’s website at www.avcdayton.com.