Finance chiefs’ optimism about the US economy remained relatively stable in the third quarter, with an average score of 60.3 on a scale from 0 to 100, according to the Duke-Fed Survey.
The score was marginally down from 60.6 in the second quarter and 61.7 in the first quarter, indicating a steady level of optimism among CFOs.
CFOs’ sentiments and optimism were also measured by their own companies’ prospects. They gave an average response of 69.7, down slightly from 70.7 in the prior quarter.
The average response at the outset of the year was 70.2, indicating a relatively stable level of optimism among CFOs about their own businesses.
However, optimism was not evenly spread among respondents. CFOs of smaller firms showed a decline in optimism about the US economy, while those at larger companies showed an increase.
20% of CFOs at smaller companies said financial constraints prevented them from making investments, compared to 11.9% of CFOs at larger companies.
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According to John Graham, finance professor and academic director of the survey, this disparity could have a negative impact on the economy. He stated that “one in five companies are affected, that does start to tug down on the economy.”
Graham also pointed out that being financially constrained does not equate to being financially distressed, but rather a sign of potential stress on smaller companies.
CFOs on average expected prices to grow 5.3% this year, and for unit cost to tick up 4.8%, indicating moderate optimism about the economy.
Monetary policy and inflation were the top concerns among CFOs in the third quarter, with 517 CFOs responding to the survey.
The survey’s results also showed that AI did not make it onto any respondents’ list of pressing concerns, despite increasing fears about self-improving artificial intelligence models.
Graham attributed this to CFOs being focused on running their businesses over the next year, and assigning a low probability to the prospect of hostile, runaway AI tools. They were more focused on immediate concerns, such as monetary policy and inflation.
