As the U.S. Federal Reserve signals its determination to lower inflation by raising interest rates, manufacturers are becoming pessimistic regarding the path of the U.S. economy, according to manufacturing executives surveyed by KPMG. Some 74 percent think there’s a greater-than-50 percent chance the U.S. will enter a recession in the 12 months to July 2023. Almost half expect the recession to be moderately severe, and 65 percent expect it to last less than a year.
Executives should prepare for not only a recession, but also the recovery that is likely to follow, by taking actions that will strengthen resilience in the short term and enhance competitiveness in the long term. These pre-emptive measures include redoubling efforts to cut costs, strengthening supply chains and using mergers and acquisitions to improve resilience.