June 30, 2022
Chief financial officers’ views on the economy for this year have worsened, according to The CFO Survey released this week by the Federal Reserve Banks of Richmond and Atlanta.
Employment growth is expected to moderate, according to the survey. In addition, CFOs expect price pressures to worsen this year and inflation-adjusted revenue growth to stagnate.
“Price pressures have increased, real revenue growth has stalled and optimism about the overall economy has fallen sharply,” said John Graham, a business finance professor at Duke University’s Fuqua School of Business and the survey’s academic director. “Monetary tightening is one of several factors dampening the economic outlook.”
CFOs, on average, expect real gross domestic product for the US to grow 1.5% over the next 12 months, down from expectations in the last quarter of 2.5%.
In addition, the average probability of negative GDP growth over the next 12 months was 21% compared to a 12% probability last quarter.
The CFO Optimism Index about the US economy continued its steep decline. On a scale from zero to 100, optimism fell to 50.7 this quarter from 54.8 last quarter and 60.3 two quarters ago.
Increasing interest rates are expected to reduce capital spending and borrowing.
The survey included 320 US financial executives and was conducted between May 25 and June 10. It is a joint project of the Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta.
