Chief financial officers in the US have become slightly more optimistic about the economy, but labor availability and inflation remain their most pressing concerns. That is according to The CFO Survey for the first quarter of 2023 released today. The survey is a collaboration by the Federal Reserve Banks of Richmond and Atlanta and Duke University’s Fuqua School of Business.

On a scale of 0 to 100, CFOs optimism about the US economy increased to 55, higher than the previous quarter but still below the historical average of 60.

CFOs were also more optimistic when it comes to growth in real GDP. They now expect 1.4% growth over the next four quarters, up from projected growth of 0.7% in the previous survey.

“Firms continue to anticipate employment and revenue growth in 2023, albeit at a slower pace than last year,” said Brent Meyer, an economist at Atlanta Fed. “Even though CFOs improved their economic outlook somewhat, they noted a confluence of challenges as they navigate a historically tight labor market, persistently high pricing pressures, and tighter monetary policy going into 2023.”

The report also revealed business spending has weakened, with 23% of firms decreasing spending in the past three months, excluding capital expenditures. This is an increase of 5 percentage points from the previous quarter’s survey and nearly twice the share of firms that had decreased spending in a survey conducted at the same time last year.

The survey closed on March 10.