Over three-quarters of global CEOs say they expect a recession to hit the region their business primarily operates in by 2023, the Conference Board found in its latest survey of 750 CEOs and other C-suite executives. The findings show a staggering change in economic outlook from the 22% who reported seeing recession risk in the business research firm’s late 2021 survey. 

Compared to CEOs, other C-suite executives expressed slightly less certainty that a recession is coming. Among them, CFOs were the least convinced; 60% expected a recession in their region by the end of next year.

Friday’s survey was fielded in May, well before the Federal Reserve hiked interest rates by 0.75% Wednesday in an attempt to curb faster-than-expected inflation. Yet at that point, 15% of CEOs believed their region was already in a recession, per the survey. 

Those fears stem from Russia’s invasion of Ukraine, which executives said has caused volatility in energy prices and rising production costs. More than half of CEOs considered those the most important issues to impact their business operations in the next year “as a direct result of the war in Ukraine.” Russia plays a significant role in global energy markets as the world’s second-largest producer of natural gas. The U.S., the U.K., and Canada have all banned importing Russian oil and gas. 

“CEOs and other C-suite executives see the war fueling inflation through energy price volatility and higher costs for scarce inputs,” the survey’s authors wrote. “This is leading to concerns over margin compression.” 

CEOs reported mixed responses regarding how they plan to deal with inflation’s impact. The most common strategy from 51% of CEOs was passing on higher costs to consumers. That was followed by cutting costs, which 47% of CEOs cited as a tactic. Thirty-six percent of CEOs said they planned to absorb the extra costs by reducing their profit margins.

Another heightened worry is that an escalation of the war could lead to Russian retaliation through cyberattacks. Now, 90% of CEOs are highly or somewhat concerned about that threat, up significantly from just 16% of CEOs who considered cybersecurity a high-impact issue for their companies before the invasion, according to the Conference Board’s previous survey.

Rerouting supply chains is the top action businesses are taking to respond to the war’s impacts. Global supply chains were already stressed from the COVID-19 pandemic. Then the Ukraine conflict disrupted traditional supply routes further and created bottlenecks for commodities like grain and industrial parts. Nearly two-thirds of global CEOs and over 70% who operate in Russia or Ukraine say they are focused on fixing those supply chains and making them more resilient. 

“Companies now recognize that shifting to regional and domestic suppliers, and diversifying supply sources away from high-risk areas and China should be strongly considered,” wrote the survey authors. 

A growing number of leading U.S. CEOs have publicly predicted that the economy is headed toward a recession.

Earlier this month, JPMorgan Chase CEO Jamie Dimon warned investors to brace themselves for an economic “hurricane” and that there were “storm clouds” on the horizon from the Ukraine war and the Fed’s interest rate hikes. 

Dimon’s gloomy forecast followed that of another banking CEO, Wells Fargo’s Charlie Scharf, who said in May that there was “no question” the U.S. was headed for some kind of economic recession. 

During a May conference, Tesla CEO Elon Musk said, “I think we are probably in a recession and that recession will get worse.” The billionaire doubled down on that claim in early June, telling Tesla executives over email that he had a “super bad feeling” about the economy. 

Others have said they are weighing the odds and preparing for an economic slowdown but that it may not reach the extent of a major recession. 

“It’s possible we go into recession, obviously, probably 50-50 odds now,” Morgan Stanley CEO James Gorman said Monday at a conference held by his bank. “We’re unlikely at this stage to go into a deep or long recession.”