CFO Outlook: Steady Overall but Weaker for Small and Financially Constrained Firms
In general, CFOs were optimistic about the economic outlook, according to the third quarter 2026 CFO Survey. However, rising optimism among large companies was somewhat offset by declining optimism for small and financially constrained firms.
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CFO Optimism
When asked between Aug. 17 and Sept. 4 to rate optimism about the overall U.S. economy on a scale from 0 to 100, the average rating from CFOs was 60.3, holding relatively steady from last quarter.
CFOs’ Most Pressing Concerns
In the third quarter, firms were most concerned about monetary policy, followed closely by inflation. Labor costs and profitability/pricing power made new appearances on the list.
CFOs’ Expectations for Their Firms’ Performance
CFOs’ report an uptick in their expectations for revenue, price, unit cost, employment, and average wage for the rest of 2026. Expectations for 2027 remained steady.
| CFOs' Growth Expectations for Their Own Firms, by Response Quarter | Q3 2026 | Q2 2026 | ||
|---|---|---|---|---|
| Mean (and Median) Expected Year-Over-Year Percentage Change for Calendar Years | 2026 | 2027 | 2026 | 2027 |
| Revenue | 7.7% (5.0%) |
7.2% (5.0%) |
6.5% (5.0%) |
7.4% (5.0%) |
| Price | 5.3% (4.0%) |
4.5% (3.0%) |
4.7% (3.0%) |
4.1% (3.0%) |
| Unit Cost | 4.8% (4.0%) |
4.2% (3.0%) |
4.5% (4.0%) |
4.0% (3.0%) |
| Employment (full-time) | 4.7% (1.7%) |
2.4% (1.4%) |
3.6% (1.7%) |
2.3% (1.5%) |
| Average Wage | 4.3% (3.8%) |
4.3% (4.0%) |
4.0% (3.1%) |
3.9% (3.0%) |
| Note: Q3 2026 data in the table reflect results for 463 to 506 U.S. firms responding to the Q3 2026 survey (Aug. 17 – Sept. 4, 2026). Results from the Q2 2026 survey (May 18 – June 5, 2026) are shown for comparison (for 474 to 524 firms). Revenue, Price, and Unit Cost are weighted by sales revenue. Employment and Average Wage are weighted by employment. These data are also winsorized at 5% to remove the potential influence of extreme values. | ||||
The share of firms that increased spending (excluding capital expenditures) in the past three months was 51.1 percent, a slight uptick from 50.4 percent in the previous quarter.
CFOs’ Expectations for the Aggregate Economy
CFOs’ expectations for real GDP growth over the next four quarters were unchanged from the prior survey. The probability respondents assigned to negative year-ahead economic growth dropped to 10.7 percent from 11.6 percent.
| CFOs' Expectations for Real GDP Growth Over Next Four Quarters, by Response Quarter | Q3 2026 | Q2 2026 |
|---|---|---|
| Weighted Mean | 1.9% | 1.8% |
| Weighted Median | 2.0% | 2.0% |
| Probability of Negative Growth | 10.7% | 11.6% |
| Note: Q3 2026 data in the table reflect results for 469 U.S. firms responding to the Q3 2026 survey (Aug. 17 – Sept. 4, 2026) and that indicate they are familiar with Gross Domestic Product (GDP). Results from the Q2 2026 survey (May 18 – June 5, 2026) are shown for comparison (for 490 firms). Responses are weighted by sales revenue. | ||
| Expectations for Stock Market Performance, by Response Quarter | Q3 2026 | Q2 2026 | ||
|---|---|---|---|---|
| Expected Annual S&P 500 Returns Over Next 12 Months and Next 10 Years | 12 Mos (N=336) |
10 Yrs (N=338) |
12 Mos (N=367) |
10 Yrs (N=372) |
| Worst Case (a 1-in-10 chance the actual return will be less than): | -1.8% | 4.0% | -2.2% | 4.1% |
| Most Likely Case | 7.9% | 9.6% | 7.8% | 9.7% |
| Best Case (a 1-in-10 chance the actual return will be greater than): | 14.3% | 14.8% | 14.2% | 14.8% |
|
Note: The table shows responses from firms that indicated they closely follow the stock market. Results from the Q2 2026 survey (May 18 – June 5, 2026) are shown for comparison. Responses are unweighted and winsorized at 5% to remove the potential influence of extreme values. Please see The CFO Survey Methodology for further information. Source: Duke Fuqua School of Business, Federal Reserve Banks of Richmond and Atlanta, The CFO Survey – Q3 2026 (Aug. 17 – Sept. 4, 2026) |
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Semiannual Questions on Investment
Firms’ plans to invest in structures and equipment declined from the last time we asked this question, in the first quarter of 2026. The decrease was larger for equipment (about 8 percentage points) than structures (about 2 percentage points).
Replacement/repair and capacity increases were the primary reasons for investment. Of firms that reported no plans to invest, a little over a quarter said they made that choice to preserve cash.
Special Questions on Employment
In the third quarter of 2026, there was a slight increase in both the number of firms hiring and the number of firms laying off workers.
Of firms that said they were laying off workers or not filling open positions, the two most common reasons for doing so were financial constraints and demand uncertainty.
Special Questions on Demand
The third quarter survey also asked firms how they expect demand for goods and services over the next 12 months to compare with the past 12 months. About 55 percent of firms expect demand to increase, and around 35 percent expect demand to remain about the same.
Special Questions on Investment
In the third quarter, most firms reported that access to or cost of financing had not constrained investment or spending plans.
Of the just under 20 percent of firms whose investment or spending plans were affected, over half said it made them unable to pursue new opportunities.
For those firms whose investment and spending plans were not constrained, the most common reason was because they had sufficient cash on hand.
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