December 21, 2022

High U.S. finance executives are usually pessimistic concerning the economic system in 2023, in keeping with at the moment’s launch of a CFO survey collectively carried out by Duke College’s Fuqua Enterprise College and the Federal Reserve Banks of Richmond, Virginia, and Atlanta. The CFO expects value progress to gradual in 2023, however inflation stays the highest concern.

The survey exhibits CFOs’ optimism for the US economic system stays at 53 on a 0-100 scale, the identical as final quarter however effectively under the historic common of about 60. 31% anticipate destructive progress in 2023. Additionally, the corporate’s 2023 gross sales progress is up solely 5% from his 2023 forecast final quarter, and he expects 2022 gross sales progress to be decrease than anticipated.

Practically two-thirds of CFOs report that present rates of interest haven’t impacted their capex or non-capital spending plans. On the identical time, about 30% say rates of interest are already holding again their spending plans. In the meantime, almost 40% mentioned they’ve already lower their spending plans or would lower their spending if rates of interest rose one other 2%.

In line with the examine, the median CFO expectation is for enter prices and product costs to rise by 5% and 4%, respectively, in 2023. Most corporations report together with cost-of-living changes within the wages they pay their workers.

Nevertheless, current mixture wage changes have averaged about 2 proportion factors under 2022 CPI progress. For companies that incorporate specific cost-of-living changes of their wages, this adjustment averages 3.3%, on prime of elevated advantages.

“The three.3% inflation adjustment means that CFOs anticipate value pressures to ease considerably in 2023, however stay above pre-pandemic inflation ranges,” mentioned the examine’s lecturers. Director Fuqua Professor John Graham mentioned: “Inflation stays the CFO’s prime concern, alongside labor availability and high quality, together with continued tightening of financial coverage. has turn out to be.”

By Editor

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