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July 14, 2021

CFOs Remain Optimistic Despite Concerns About Cost Pressures, Labor Availability

CFOs and other financial decision-makers continue to be optimistic about U.S. economic prospects for 2021, according to the results of The CFO Survey, a collaboration of Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta. However, when asked about their key concerns, labor availability and cost pressures rose to the top.

The widespread labor shortages are not without cost. More than half of the 75 percent of firms that reported challenges finding workers also reported that the worker shortage reduced revenue—and this was even more pronounced for small businesses. Aggregated across the panel, labor shortages alone cost the economy 2.1 percent, or $738 billion, in lost revenue.

“CFOs expect revenue and employment to rise notably through the rest of 2021,” said Sonya Ravindranath Waddell, vice president and economist at the Federal Reserve Bank of Richmond. “Nonetheless, well over a third of firms anticipated worker shortages to reduce revenue potential in the year. With so many firms unable to find the employees or inputs to meet the demand for their products and services, it is not surprising that respondents anticipated both cost and price increases.”

Approximately 80 percent of respondents reported larger than normal cost increases that are anticipated to last for many months. Much, though not all, of this increase is expected to translate into price increases.

In spite of the concerns, CFOs expressed growing optimism for their own firms, with average optimism at 74.9 on a scale of 0 to 100 – above the first quarter reading of 73.2. When asked to rate their optimism about the overall U.S. economy, the average rating was 69.0, an increase from the 67.7 reading in the first quarter.

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 Sign up to receive email notifications when new results are posted.

Note: A previous version of this news release misstated the amount of lost revenue attributed to labor shortages.

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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