Chief financial officers (CFOs) taking part in The CFO Survey by Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta are “reasonably optimistic about 2021,” one of the study’s leaders said in a news release.
“CFOs are looking past the pandemic and are reasonably optimistic about 2021,” John Graham, a Duke Fuqua finance professor and the survey’s academic leader, said in the release. “However, they note several important risks and uncertainties, including a shift from concerns of low demand to issues such as labor quality, tax policy and increased automation.”
Speaking with The Wall Street Journal (WSJ), Graham said the optimism will depend on the pace of COVID-19 vaccinations, with any delays possibly hampering economic growth.
“If there is a snafu with the vaccine, that would be another layer of risk,” he told WSJ. “[CFOs] are assuming we will make progress with the vaccine.”
Meanwhile, almost 70 percent of North American CFOs in a Deloitte survey said they expect a boost to the economy by the middle of next year due to the vaccine, WSJ reported.
The CFO Survey data was gathered Nov. 30 through Dec. 11, according to the news release.
Asked to rate their optimism for their own firms’ economic futures on a scale of 0 to 100, the CFO’s gave an average number of 71, the release stated. In the late-summer survey, they provided a slightly lower average response of 70.4.
As for the national economy as a whole, the CFOs in the latest survey gave an average number of 61.6 out of 100 possible points, the release stated. That’s a slight increase from the 61 average figure the CFOs provided during the late-summer survey.
One of the concerns expressed in the latest survey, according to its authors, was “considerable uncertainty about revenue expectations,” per the release.
“While hiring is expected to rebound in 2021, more than half of large firm CFOs say their companies are shifting away from labor toward automation,” the release stated. “Among firms ramping up automation, approximately 80 percent say automation is reducing the need for low-skill workers, compared to about 45 percent replacing high-skill employees.”
The top concerns expressed by CFOs in the late-November-early-December survey were demand and revenue, labor quality and availability, the overall health of the economy and tax policy. Of 10 categories, the area of least concern to the CFOs was “Impact of COVID-19/Lockdown Policies.”