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Here’s your latest reminder that, right now, the economic vibes are good. CFOs showed their strongest optimism for the U.S. economy in nearly three years, according to a quarterly Fed survey.
According to the survey from the Federal Reserve Banks of Richmond and Atlanta and Duke University released on Wednesday, CFOs expected 2.2% real GDP growth over the next four quarters, up from 1.7% the previous quarter and 1.4% the same period last year. CFOs also rated their optimism of the overall economy at 61 on a scale of 0-100, which was the highest level since Q2 2021, according to the Fed.
“CFOs have improved their economic outlook amid stronger realized growth in the U.S. economy,” Atlanta Fed economist Brent Meyer said in a news release. “Firms still face many challenges, including a tight labor market and persistent pricing pressures, but there is less concern over a downturn in economic growth compared to previous quarters.”
Finance chiefs have an even rosier view of their own firm’s financial prospects, at the nice score of 69. Meanwhile, more than half of organizations “expect price growth in 2024 to remain above pre-Covid levels, suggesting that for many firms, pricing pressures remain above what they consider normal,” according to the survey.
Robots are coming. It’s not a CFO survey without questions about AI and other automation tech. When asked by the Fed, half of the CFOs surveyed said that their firms had adopted “labor-replacing automation” within the last year. ”This includes around 75 percent of larger firms (over 500 employees), and 44 percent of smaller firms,” the survey’s authors noted.
For 85% of the respondents, cost savings was the predominant motivator for implementing automation. Following that were quality control (about 60%), employee experience (50%) and customer satisfaction (roughly 45%).