The CFO Survey Shows Business Confidence Beginning to Rebound as Firms Grapple with Effects of COVID-19

CFO Optimism

When survey participants were asked between June 15 and June 26 to rate the financial prospects of their firms on a scale from 0 to 100, the average optimism level was 69.8. When asked to rate their optimism about the overall U.S. economy, the average index was 59.8. Both indexes indicated improvement from the first quarter.

Note: The dashed vertical line denotes a moderate change in the question wording and presentation. Please see The CFO Survey Methodology for further information.
CFOs' Most Pressing Concerns
The most common concern expressed by far in the second quarter was sales/revenue and customer demand.
```
Concern,Share of Total Mentions
Demand/Sales/Revenue,23.6
Health of the Economy,8.2
Liquidity/Cash Flow,6.8
Labor Quality/Availability,5.7
Political Climate,4.4
Supply Chain Concerns,3.8
Resurgence of Covid-19,3.8
Financial Health of Customers,3.8
Access to Credit/Funding,3.8
Insurance Costs,3.5
```
Note: Data reflect results from the Q2 2020 survey conducted June 15–26. Percentages do not sum to 100 because only the top ten topics are shown. Please refer to The CFO Survey Methodology for more information.
CFOs’ Expectations for Their Firms’ Performance
Financial leaders responding to the second quarter survey broadly expected revenue, operating income, employment, and wage compensation to pick up in 2021 after declining in 2020. Growth in prices and non-wage compensation were also expected to pick up in 2021.
```
,2020,2021
Revenue,-1.909792542,7.235
Price,1.416168571,2.851
Operating Income,-3.875486135,8.626
Employment,-5.125256538,4.227
Wage bill,-2.573292494,4.379
Non-wage compensation,1.129666805,6.371
```
Note: Data reflect results for 265 to 286 U.S. firms responding to the Q2 2020 survey conducted June 15–26. Revenue, Operating Income, and Prices are weighted by sales revenue. Employment, Wage Bill, and Non-wage Compensation are weighted by employment. These data are also winsorized at 2.5% and 97.5% to remove the potential influence of extreme values. The 2020 employment expectations are calculated using respondents’ employment levels from before the start of the pandemic in early March. All other variables, including 2021 employment growth are full calendar year expectations. Please refer to The CFO Survey Methodology for more information.
CFOs’ Expectations for the Aggregate Economy
Among survey respondents in the second quarter, the median expectation for real GDP growth over the next four quarters was 0.9 percent.
```
GDP Growth Range,Mean Probability
Less than -12,2.388247252
-12.0 to -6.1,6.495449543
-6.0 to -3.1,13.72338486
-3.0 to -0.1,17.3340168
0.0 to 1.4,14.54584122
1.5 to 2.4,13.63239002
2.5 to 3.9,11.46394253
4.0 to 6.9,10.68080711
7.0 to 9.9,4.909707069
10.0 to 15.9,4.02281189
16 or more,0.803400755
```
Weighted Mean 0.6%
Weighted Median 0.9%
Probability of Negative Growth
(mean share of probability on bins below zero)
39.9%
Note: Data in the chart and table reflect results for 260 U.S. firms responding to the Q2 2020 survey conducted June 15–26. Responses are weighted by sales revenue. Probabilistic expectations that do not sum to 100 percent are excluded. Firms are first asked to gauge their familiarity with real Gross Domestic Product (GDP). Those who indicate they are unfamiliar with the concept are not presented with this question. Please refer to The CFO Survey Methodology for more information.

The second quarter CFO Survey included a semiannual credit module to understand firms’ requests for credit, sources of credit, and perceived access to credit.

,Percent
Yes,47.1
No,52.9

Note: Data reflect results for 291 U.S. firms responding to the Q2 2020 survey conducted June 15–26.

Credit Received,Percent of Firms
None,2.2
1-25%,5.1
26-50%,2.2
51-75%,5.1
76-100%,82.4
Unsure,2.9

Note: Data reflect results for 136 U.S. firms indicating they had applied for credit in the last 6 months in the Q2 2020 survey conducted June 15–26.

Credit source,Percent of Credit Applicants
Bank,62.8
Credit Union,1.5
Fintech/Online Lender,1.5
Finance Company,4.4
CDFI,0.0
Gov,55.5
Other,8.8

Note: Data reflect results for 136 U.S. firms indicating they had applied for credit in the last 6 months in the Q2 2020 survey conducted June 15–26. Percentages do not sum to 100 because respondents could report more than one lender.

Overall, do you feel obtaining credit for this business has become more difficult, less difficult, or has remained the same over the last 6 months? Percent of Firms
More Difficult (and reason)	32.4%
Change in Creditworthiness of Business	8.8%
Change in Lending Standards	14.7%
Other	8.8%
Same	56.6%
Less Difficult (and reason)	11.0%
Change in Creditworthiness of Business	1.5%
Change in Lending Standards	4.4%
Other	5.1%

Note: Data reflect results for 136 U.S. firms indicating they had applied for credit in the last 6 months in the Q2 2020 survey conducted June 15–26.

Special Questions on Effects of COVID-19
The second quarter CFO Survey included special questions on the effects of COVID-19 on firms’ employment, revenue, and use of the Paycheck Protection Program.
```
,Mean,Median,25th Percentile,75th Percentile
Pre-COVID (early March) to mid-June,-5.45949,0,-6.89655,0
June to end of 2020,0.04386,0,-0.57971,2.380952
Full-Year 2021,4.226954,2,0,5.586592
```
Note: Data reflect results for 244 to 265 U.S. firms responding to the Q2 2020 survey conducted June 15–26. Responses are weighted by employment (truncated at 85th percentile) and winsorized at 2.5% and 97.5%.
```
,Percent
Pre-Covid through end of 2020,-5.1431742
Pre-Covid through end of 2021,-2.160461
```
Note: Data reflect results for 263 to 266 U.S. firms responding to the Q2 2020 survey conducted June 15–26. Responses are weighted by employment (truncated at 85th percentile) and winsorized at 2.5% and 97.5%.
```
Why Reduce,Percent of Firms
Reduced Demand,83.1
Firm Liquidity,22.9
Supply Chain Disruptions,19.3
High Labor Costs from COVID Protocol,18.1
Other,24.1
```
Note: Data reflect results for 83 U.S. firms responding to the Q2 2020 survey conducted June 15–26. Firms received this question if they indicated they reduced their number of domestic, full-time employees since early March 2020. Percentages do not sum to 100 because respondents could select up to three options.
```
Receive PPP,Percent of Firms
Yes,93.3
No,6.7
```
Note: Data reflect results for 75 U.S. firms responding to the Q2 2020 survey conducted June 15–26. Firms received this question if they selected Government as the lender for a loan request.

What share of the PPP loan amount received do you expect will be forgiven?
Mean 94.6%
Median 100%
25^th Percentile 99.0%
75^th Percentile 100%
Note: Data reflect results for 68 U.S. firms responding to the Q2 2020 survey conducted June 15–26. Firms received this question if they selected Government as the lender for a loan request and received PPP funds.

By roughly what percentage do you anticipate the COVID-19 pandemic will change your calendar year 2020 revenue?
Weighted Mean -13.8%
Weighted Median -10.0%
25^th Percentile -20.0%
75^th Percentile -5.0%
Note: Data reflect results for 250 U.S. firms responding to the Q2 2020 survey conducted June 15–26. Responses are weighted by sales revenue and winsorized at 2.5% and 97.5%.

Weighted Mean	0.6%
Weighted Median	0.9%
Probability of Negative Growth (mean share of probability on bins below zero)	39.9%

What share of the PPP loan amount received do you expect will be forgiven?
Mean	94.6%
Median	100%
25^th Percentile	99.0%
75^th Percentile	100%

By roughly what percentage do you anticipate the COVID-19 pandemic will change your calendar year 2020 revenue?
Weighted Mean	-13.8%
Weighted Median	-10.0%
25^th Percentile	-20.0%
75^th Percentile	-5.0%

Data & Results – Q2 2020

The CFO Survey Shows Business Confidence Beginning to Rebound as Firms Grapple with Effects of COVID-19

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