According to the latest quarterly CFO survey, conducted by Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta, nearly a third (30 percent) of CFOs are postponing, scaling back, delaying, or canceling investment plans due to election uncertainty. This is a slight increase from 28 percent reported in the previous quarter.
Most CFOs agree that the upcoming presidential election will affect their businesses, but the extent of the impact varies based on factors like industry, company size, revenue, and future plans. However, growing political and economic concerns are likely influenced by uncertainty surrounding the election and related events.
CFOs facing election-related uncertainty aren’t just less optimistic; they're also forecasting slower revenue and job growth compared to their competitors. Despite this cautious outlook, surveyors suggest that the impact may be temporary, with conditions potentially stabilizing after the election.
CFOs anticipating the election's impact expect their growth rates to realign with unaffected firms by 2025. However, there’s a caveat: those projecting weaker growth in 2024 aren’t expecting to recover lost ground. Instead, they foresee a permanent loss of 1 to 2 percentage points in growth, aiming to return to normal growth next year but without compensating for the shortfall.
Optimism and growth expectations among this group are notably lower. Their business and economic optimism has dropped seven points compared to the general panel and 10 points lower than CFOs who aren’t concerned about election-related uncertainty.
CFOs impacted by election uncertainty are bracing for lower revenue and employment growth for the rest of the year. Like business growth, they don’t expect to recover any losses in the following quarters, with many viewing the negative effects of the election as permanent.
These firms are also less likely to invest in expanding or maintaining capacity. Instead, CFOs from affected companies are shifting their focus toward investments in equipment and property that offer cost-cutting benefits. This suggests a strategic turn, with firms prioritizing efficiency and savings over growth amid election-related uncertainty.
Firms not experiencing an election-related pullback in capital expenditure (CapEx) are more likely to focus on investments in equipment and structures/land for replacement and repair. In contrast, those concerned about the election’s impact are primarily focused on cost reduction across both categories, with cost-cutting being the only majority investment priority for companies feeling the uncertainty.
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