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CFOs optimistic, expect ‘soft landing’ in 2024

CFOs optimistic, expect ‘soft landing’ in 2024

SIA Editorial Staff
| September 25, 2024
Upturn in the economy.

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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 still expect employment and revenue growth in the third quarter. About 450 financial executives reported little change in optimism about the economy or about their own firm prospects.

The third-quarter survey found a median 1.5% of CFOs expect year-over-year growth in full-time employment this year, up from a median 0.8% who expected growth in the second-quarter survey. However, looking toward next year, the survey found a median 2.2% expect such growth in 2025, down from a median 2.4% in the last quarter’s survey.

Median expectations for wage bill growth remained at 4.0% for both 2024 and 2025.

“In spite of uncertainty in the economy, firms still expect a soft landing,” said Sonya Ravindranath Waddell, VP 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% 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.

The survey included responses from 426 to 472 US firms and was conducted between Aug. 19 and Sept. 6.