CFOs were slightly more optimistic about the U.S. economy in the fourth quarter, with many expecting price growth at their organizations to remain above pre-COVID levels in 2024, according to results of The CFO Survey, a collaboration of Duke University's Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta.
On a scale from 0 to 100, the average CFO rating for optimism about the U.S. economy was 58.0, up from 56.2 in the third quarter, according to the survey. At an average of 67.3,, optimism about their own organization's prospects remained higher than economic optimism, but fell from 67.8 in the third quarter.
"Alongside an increase in economic optimism, respondents' expectations for national economic growth rose from the previous survey," Sonya Ravindranath Waddell, vice president and economist with the Federal Reserve Bank of Richmond, said in a Dec. 20 news release. "At the same time, almost 60% of firms expect their price growth in 2024 to remain elevated relative to pre-COVID norms. Expectations for compensation growth also remain above what firms consider normal."
Despite generally positive expectations for 2024, there was some indication from CFOs that companies were continuing to cut back, according to the survey. The share of organizations that report increased spending continued to shrink. On the other hand, 70% of respondent firms — and almost 90% of large firms — have existing debt, much of which is expected to come due in the next few years.
Companies that aim to roll over their debt are facing higher interest costs, which suggests that there could be some headwinds to economic growth in 2024, according to the report.