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Data & Results – Q3 2020

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.

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  • CFO Optimism

    When survey participants were asked between September 14 and September 25 to rate the financial prospects of their firms on a scale from 0 to 100, the average optimism level was 70.4. When asked to rate their optimism about the overall U.S. economy, the average index was 61.0. Both indexes were in line with second quarter readings and well above readings 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

    When firms were asked about their most pressing concerns, the most common responses in the third quarter were the firm’s own demand/sales/revenue, the availability and quality of labor, the broad health of the economy, and the political climate.

    Note: Data reflect results from the Q3 2020 survey (September 14–25, 2020). Percentages do not sum to 100 because only the top ten topics (and ties) are shown. Results from the Q2 2020 survey (June 15–26, 2020) are shown for comparison, but some categories from the original reporting may no longer rank in the top ten. Please refer to The CFO Survey Methodology for more information.
  • CFOs’ Expectations for Their Firms’ Performance

    Financial leaders responding to the third quarter survey broadly expected revenue and employment to pick up in 2021 after some decline in 2020. Wages and non-wage compensation were also expected to grow faster in 2021.

    CFOs’ Growth Expectations for Their Own FirmsQ3 2020Q2 2020
    Mean Expected Year-Over-Year Percentage Change for Calendar Years2020202120202021
    Revenue-0.2%8.7%-1.9%7.2%
    Prices1.7%4.3%1.4%2.9%
    Employment (full-time)-2.4%2.2%-5.1%4.2%
    Wage Bill1.9%5.4%-2.6%4.4%
    Non-wage Compensation3.8%6.0%1.1%6.4%
    Note: Q3 2020 data in the chart and table reflect results for 244 to 269 U.S. firms responding to the Q3 2020 survey (September 14–25, 2020). Results from the Q2 2020 survey (June 15–26, 2020) are shown for comparison. Revenue 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. All variables are full calendar year expectations except for the expected percentage change in 2020 employment from the Q2 2020 survey; that percentage change was calculated using respondents’ employment levels from before the start of the pandemic in early March. Please refer to The CFO Survey Methodology for more information.

    CFOs indicated that their firms continue to limit spending. More than half of respondent firms reported either “somewhat” or “significantly” decreased spending in the third quarter.

    Note: Data reflect results for 269 U.S. firms responding to the Q3 2020 survey (September 14–25, 2020). Results from the Q2 2020 survey (June 15–26, 2020) are shown for comparison.
  • CFOs’ Expectations for the Aggregate Economy

    Among survey respondents in the third quarter, the mean expectation for real GDP growth over the next four quarters was 2.2 percent.

    Expectations for Real GDP Growth Over Next Four QuartersQ3 2020Q2 2020
    Weighted Mean2.2%0.6%
    Weighted Median1.5%0.9%
    Probability of Negative Growth
    (mean share of probability on bins below zero)
    22.9%39.9%
    Note: Q3 2020 data in the chart and table reflect results for 244 U.S. firms responding to the Q3 2020 survey (September 14–25, 2020). Results from the Q2 2020 survey (June 15–26, 2020) are shown for comparison. 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.
  • Semiannual Questions on Investment

    The third quarter CFO Survey included a semiannual investment module to ask participants about their recent structures and equipment investment decisions. Fewer than a third of firms reported plans to increase spending on structures over the next six months. Of the more than 60 percent who plan equipment spending, most reported spending to repair or replace existing equipment.

    Note: Data reflect results for 270 U.S. firms responding to the Q3 2020 survey (September 14–25, 2020).
    Note: Data reflect results from the Q3 2020 survey (September 14–25, 2020). The chart shows responses from 84 U.S. firms that indicated they planned to invest in structures/land in the next six months, and 171 U.S. firms that indicated they planned to invest in equipment in the next six months. Percentages do not sum to 100 because respondents could report more than one purpose.
    Note: Data reflect results from the Q3 2020 survey (September 14–25, 2020). The chart shows responses from 82 U.S. firms that responded “no” to both equipment and structures planned investment over the next six months. Percentages do not sum to 100 because respondents could report more than one reason.
  • Special Questions on Effects of COVID-19

    The third quarter CFO Survey included special questions on the effects of COVID-19 on firms’ revenue, employment, share of workforce working remotely, and willingness to spend on structures and equipment. Very few firms that are currently below their pre-COVID-19 revenue, employment, or willingness to spend expect to return to pre-COVID-19 levels in 2020.

    Note: Data reflect results for 259 to 268 U.S. firms responding to the Q3 2020 survey (September 14–25, 2020).
    Note: Data reflect results from the Q3 2020 survey (September 14–25, 2020). The chart shows responses from 165 U.S. firms that indicated they currently have lower revenue than before the outbreak of COVID-19, 102 U.S. firms that indicated they have lower employment than pre-COVID-19, and 125 U.S. firms that indicated they are currently less willing to spend on structures and equipment than pre-COVID-19.
    Note: Data reflect results from the Q3 2020 survey (September 14–25, 2020). The chart shows responses from 35 U.S. firms that indicated they currently have higher employment than before the outbreak of COVID-19, and 178 U.S. firms that indicated they have a higher share of their workforce working remotely than pre-COVID-19.

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