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Data & Results – Q1 2021

Apr. 7, 2021

CFOs Report Optimism About Economic Growth

CFOs and other financial decision-makers are increasingly optimistic about strong U.S. economic prospects for 2021.

News Release

  • CFO Optimism

    When survey participants were asked between March 15 and March 26 to rate the financial prospects of their firms on a scale from 0 to 100, the average optimism level was 73.2. When asked to rate their optimism about the overall U.S. economy, the average index was 67.7, which was a marked increase from the 61.6 reading in the fourth 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, demand/sales/revenue was less of a key concern for respondents in the first quarter compared to the fourth quarter of 2020. Labor quality/availability remained the second-most mentioned concern.

    Note: Data reflect results from the Q1 2021 survey (March 15–26, 2021). Percentages do not sum to 100 because only the top ten topics (and ties) are shown. Results from the Q4 2020 survey (November 30 to December 11, 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

    On average, expectations for revenue and employment growth in 2021 improved from the fourth quarter of 2020. Firms were also more likely to have increased spending (and less likely to have decreased spending) in the last three months.

    CFOs’ Growth Expectations for Their Own Firms, by Response QuarterQ1 2021Q4 2020
    Mean Expected Year-Over-Year Percentage Change for Calendar Years2021202220202021
    Revenue8.0%
    9.0%
    0.3%
    6.9%
    Prices5.0%
    4.4%
    1.9%
    4.0%
    Employment (full-time)5.5%
    3.9%
    0.7%
    4.1%
    Wage Bill4.6%
    5.1%
    1.3%
    4.0%
    Non-wage Compensation5.3%
    5.8%
    3.2%
    5.8%
    Note: Q1 2021 data in the chart and table reflect results for 322 to 336 U.S. firms responding to the Q1 2021 survey (March 15–26, 2021). Results from the Q4 2020 survey (November 30 to December 11, 2020) are shown in the table 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. Please refer to The CFO Survey Methodology for more information.
    Note: Q1 2021 data reflect results for 346 U.S. firms responding to the Q1 2021 survey (March 15–26, 2021). Results from the Q4 2020 survey (November 30 to December 11, 2020) are shown for comparison.
  • CFOs’ Expectations for the Aggregate Economy

    Among survey respondents in the first quarter, the mean expectation for real GDP growth over the next four quarters was 4.2 percent. Respondents expected an average annual return on the S&P 500 of 6.8 percent over the next 12 months and 8.4 percent over the next 10 years.

    Expectations for Real GDP Growth Over Next Four Quarters, by Response QuarterQ1 2021Q4 2020
    Weighted Mean4.2%
    2.8%
    Weighted Median3.8%
    2.5%
    Probability of Negative Growth
    (mean share of probability on bins below zero)
    3.3%
    15.2%
    Note: Q1 2021 data in the chart and table reflect results for 306 U.S. firms responding to the Q1 2021 survey (March 15–26, 2021). Results from the Q4 2020 survey (November 30 to December 11, 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.
    Expectations for Stock Market Performance
    (for Average Annual S&P 500 Returns)
    Expected Return Over Next 12 MonthsExpected Return Over Next 10 Years
    Worst Case (a 1-in-10 chance the actual return will be less than):-2.8%
    2.4%
    Most Likely Case6.8%8.4%
    Best Case (a 1-in-10 chance the actual return will be greater than):12.4%
    13.1%
    Note: Data reflect results from the Q1 2021 survey (March 15–26, 2021). The table shows responses from 231 to 234 U.S. firms that indicated they closely follow the stock market. Responses are unweighted and winsorized at 2.5% and 97.5% to remove the potential influence of extreme values. Please refer to The CFO Survey Methodology for more information.
  • Semiannual Questions on Investment

    The first quarter CFO Survey included a semiannual investment module to ask participants about their recent structures and equipment investment decisions. Only about one-third of firms anticipate investing in construction over the next six months. Nearly two-thirds of firms anticipate spending on equipment in the near-term, but among these firms many said they were investing to replace or repair existing equipment, rather than to increase capacity. The majority of firms not intending to invest in either equipment or structures over the next six months cite adequate or excess capacity as the reason. Relative to our Q3 2020 survey, fewer firms indicated “uncertainty” or “need to preserve cash” as restraints on their investment plans.

    Note: Q1 2021 data reflect results for 344 to 345 U.S. firms responding to the Q1 2021 survey (March 15–26, 2021). Results from the Q3 2020 survey (September 14–25, 2020) are shown for comparison.
    Note: Q1 2021 data reflect results for 117 U.S. firms that indicated they planned to invest in structures/land in the next six months in the Q1 2021 survey (March 15–26, 2021). Results from the Q3 2020 survey (September 14–25, 2020) are shown for comparison. Percentages do not sum to 100 because respondents could report more than one purpose.
    Note: Q1 2021 data reflect results for 218 U.S. firms that indicated they planned to invest in equipment in the next six months in the Q1 2021 survey (March 15–26, 2021). Results from the Q3 2020 survey (September 14–25, 2020) are shown for comparison. Percentages do not sum to 100 because respondents could report more than one purpose.
    Note: Q1 2021 data reflect results for 110 U.S. firms that responded “no” to both equipment and structures planned investment over the next six months in the Q1 2021 survey (March 15–26, 2021). Results from the Q3 2020 survey (September 14–25, 2020) are shown for comparison. Percentages do not sum to 100 because respondents could report more than one reason.
  • Special Question on Fiscal Stimulus

    In response to a special question on anticipated effects of the recent fiscal relief plan for their business, 76 percent of firms expected no impact on employment, 65 percent expected no impact on prices, 55 percent expected no impact on total wages, and 53 percent expected no impact on revenue. Most of the rest of the firms expected the relief package to “somewhat” increase those variables.

    For additional discussion of these results, visit our Research & Commentary section.
    Note: Data reflect results for 343 to 344 U.S. firms responding to the Q1 2021 survey (March 15–26, 2021).

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