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Oct. 7, 2020

The CFO Survey Shows Expectation of Slow Recovery

Corporate financial decision-makers generally expect employment and revenues to remain below pre-COVID levels until at least 2021, although they remain optimistic about the future financial prospects for the U.S. economy and their own firms. This is according to results of The CFO Survey, a collaboration of Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta.

The CFO Survey was conducted from September 14–25, 2020, among financial decision-makers in U.S. firms of varying sizes and across industries. When participants were asked to rate their optimism for the financial prospects of their firms, the average optimism was just above 70 on a scale of 0 to 100 —approximately in-line with the second-quarter reading. When asked to rate their optimism about the overall U.S. economy, the average rating was 61, also in-line with the average of 60 from the second-quarter survey, which was conducted from June 15–26. Both of the new optimism ratings were well above those reported in the first quarter, which marked the onset of the pandemic-induced economic downturn.

Despite the increased optimism since the spring, firms still report being below their pre-COVID levels of revenue and employment. In addition, the average firm anticipated months, if not years, until a full recovery, and almost 40 percent of respondents said they are not likely to revert to pre-COVID levels of remote work.

“More than 60 percent of respondents reported that revenue projections have not recovered to their pre-COVID mark and about 40 percent report lower employment,” said John Graham, finance professor at Duke’s Fuqua School of Business. “Moreover, only about one-quarter of the firms that are below pre-COVID levels anticipated a full revenue or employment recovery by June 2021.”

CFOs also indicate that their firms continue to limit spending and investment. More than half of respondent firms reported either “somewhat” or “significantly” decreased spending in the third quarter, compared to what is typical for the business. Looking forward, fewer than a third of the firms report plans to increase spending on structures over the next six months. Of the 60 percent who plan equipment spending, most report spending to repair or replace existing equipment. Firms that are abstaining from spending on structures or equipment offer three primary reasons: an uncertain environment, no need to expand capacity and a need to preserve cash.

“Measures of uncertainty remain elevated and we can see that reflected in the decision by many firms not to invest in capital,” said Brent Meyer, senior policy advisor at the Federal Reserve Bank of Atlanta.

With respect to gross domestic product, firms anticipate continued slow growth during the next four quarters, averaging about 2.2 percent. The most pressing concerns firms cited involved their own demand, sales or revenues, as well as labor availability, the broad health of the economy and the political climate.

“The economy is recovering, to be sure, and business confidence has improved since the spring,” said economist Sonya Ravindranath Waddell, a vice president at the Federal Reserve Bank of Richmond. “But all indicators from The CFO Survey point towards a slow return to normal that is challenging to forecast due to the uncertainty created by this virus.”

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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