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Dec. 21, 2022

2023 CFO Outlook: Weak Growth; Wages Trail Inflation

U.S. financial executives are generally pessimistic about next year’s economy, saying they expect price growth to subside some in 2023 but still remain high. They also report that wages at their firms have not kept pace with inflation, according to The CFO Survey, a collaboration between Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta.

The survey, which closed on December 2, found that CFOs’ median expectation is for input costs and product prices to increase by 5 and 4 percent, respectively, in 2023.

Most companies reported including a cost-of-living adjustment in the wages they pay their own employees. Recently, however, total wage adjustments averaged about two percentage points below 2022 growth in the Consumer Price Index (CPI). Among companies that include an explicit cost-of-living adjustment to wages, this adjustment will average 3.3 percent, in addition to merit increases.

“A 3.3 percent inflation adjustment suggests that CFOs expect price pressures to soften somewhat in 2023, but remain above pre-pandemic inflation levels,” said Fuqua professor John Graham, academic director of the survey. “Inflation remains the top worry of CFOs, alongside availability and quality of labor, followed by tightening monetary policy. This list of challenges is causing CFOs to be pessimistic about the overall economy in 2023.”

CFO optimism about the U.S. economy remains at 53 on a scale of 0 to 100, the same as last quarter but well below the historic average of about 60. And CFOs expect real GDP to grow by only 0.7 percent in 2023, with 31 percent of CFOs expecting negative real growth. Also, CFOs anticipate their companies’ revenues to grow by only 5 percent in 2023, which is down from last quarter’s 2023 forecast and also less than anticipated 2022 revenue growth.

About two-thirds of CFOs report that current interest rates have not affected their capital expenditures or non-capital spending plans, while about 30 percent say that rates have already dampened spending plans. Nearly 40 percent say they either have already curtailed spending plans or would curtail spending should interest rates increase by another two percentage points.

The CFO Survey is conducted 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 and new results.

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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