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March 29, 2023

CFOs Modestly Upgrade Economic Outlook Despite Labor Market, Inflation Concerns

Financial decision-makers became slightly more optimistic about the U.S. economy and increased their expectations for real GDP growth in 2023, while citing labor availability and inflation as the most pressing concerns for their company, 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.

The survey, which closed on March 10, found that CFO optimism about the U.S. economy was 55 on a scale of 0 to 100, modestly higher than last quarter but well below the historic average of about 60. Additionally, CFOs revised upward their expectations for real GDP growth over the next four quarters to 1.4 percent from 0.7 percent in the prior survey. Moreover, the probability respondents assigned to negative year-ahead economic growth fell from 31 percent last quarter to 19 percent this quarter.

“Firms continue to anticipate employment and revenue growth in 2023, albeit at a slower pace than last year,” said Atlanta Fed economist Brent Meyer. “Even though CFOs improved their economic outlook somewhat, they noted a confluence of challenges as they navigate a historically tight labor market, persistently high pricing pressures, and tighter monetary policy going into 2023.”

The business spending picture has deteriorated somewhat. The share of firms that decreased spending (excluding capital expenditures) in the past 3 months rose to 23 percent, an increase of 5 percentage points from last quarter’s survey and nearly twice the share of firms that had decreased spending in a survey conducted this time last year. For capital expenditures, the share of firms planning investments has also edged lower over the past year. Among companies not planning to invest at all in the next six months, most cited ample capacity, and the share of these CFOs noting unfavorable financing conditions increased to 24 percent, up from 14 percent in Q3 2022 and 7 percent a year ago.

In a series of special questions on energy, roughly three-quarters of firms noted that their costs associated with energy usage increased since the start of 2022. Most of these firms noted that increased energy costs decreased their profitability. Only about 20 percent of respondents indicated passing the majority of their cost increases on to customers.

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.

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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