CFOs Remain Optimistic for 2024

CFOs remain largely optimistic about their economic trajectory as they plan for the last quarter of 2024, according to The CFO Survey, a collaboration of Duke University's Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta.

Despite increased concerns around the health of the overall economy and some uncertainty related to the upcoming election, respondents said they still expect employment and revenue growth in the third quarter. In the survey that closed on Sept. 6, about 450 financial executives reported little change in optimism about the economy or about their own firm prospects.

"In spite of uncertainty in the economy, firms still expect a soft landing," said Sonya Ravindranath Waddell, vice president and economist with the Federal Reserve Bank of Richmond. "Financial executives expect to see growth in their employment and revenues through the year as firms continue to invest in the infrastructure that they need not just to continue operations, but to increase capacity and offer new products. In addition, expectations for price growth continue to come down into more normal territory."

But there are headwinds. About 30 percent of firms reported postponing, scaling down, or canceling investment plans due to uncertainty around the upcoming election. In addition to the political climate, respondents cited as other concerns the overall health of the economy and future demand.

When asked, about a quarter of firms said that access to or cost of financing would constrain their capital spending in the next 12 months - a response that was more common among small firms than large firms. On average, the firms that were financially constrained would plan to invest almost 40 percent more on capital relative to their current spending plans if constraints were removed.

Nonetheless, the share of firms intending to invest in the next six months did not change much since the first quarter of the year. In the new survey, more than a third of firms responded that they intend to invest in structures in the next six months and two-thirds intend to invest in equipment. Although most firms report that they are investing to repair or replace existing infrastructure, firms also reported increasing capacity and offering new products or services.

The CFO Survey is issued by Duke University's Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta. The latest survey, as well as historical data and commentary, can be found at www.cfosurvey.org. Sign up to receive email notifications when new results are posted.

As part of our nation's central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District - including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia - to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that's fit for distribution, and provide a safe and efficient way to transfer funds through our nation's payments system.

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