93% of CEOs say they're preparing for a recession over the next 12 to 18 months — here's how they are shock-proofing and how you can, too

“CEO confidence ticked down slightly in Q2 and remains firmly in negative territory,” Dana M. Peterson, Chief Economist of The Conference Board, said in a press release.

The survey revealed that CEO confidence dropped to a score of 42, which is below the 50 threshold, indicating business leaders are more pessimistic than optimistic about the economic outlook.

Inflation, rising rates, stagnant wages and the ongoing banking crisis may all be culminating in this economic slowdown. Here’s how business leaders are preparing for the upcoming recession and how you can too.

Focus on liquidity

Spooked by the ongoing banking crisis, business leaders were actively reviewing the liquidity of all stakeholders. According to the The Conference Board survey, 62% of CEOs were reviewing their banking relationships

“Large numbers are also reviewing their firms’ risk management practices and liquidity adequacy—as well as those of customers and suppliers,” said Roger W. Ferguson, Jr., Vice Chairman of The Business Council and Trustee of The Conference Board.

Simply put, some business leaders are worried that their counter-parties might run out of funds in the months ahead and are shoring up their capital reserves in preparation.

Ordinary savers and investors should probably do the same. Boosting cash reserves and spreading it out across government treasuries, corporate bonds and different savings accounts could be the best way to mitigate the risk of an economic crisis.

Cut back on expenses

Less than a third (27%) of CEOs surveyed said they expect to increase their capital budgets in the coming year.

Managing expenses is a key way to protect one’s finances from an economic crisis. Dozens of companies have already taken the extreme measure of laying off thousands of workers this year.