Though CFOs remain optimistic about future financial prospects, they generally expect employment and revenues to remain below pre-COVID levels until at least 2021, a survey from Duke University's Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta found.
The survey, conducted among 269 CFOs in late September, found CFOs' optimism for their firms' financial prospects to hover around 70 on a scale of 0 to 100 — approximately the same as in June.
CFOs' average optimism rating for the broader U.S. economy came to 61, also in line with the June average of 60. Both new optimism ratings far exceeded those reported in the first quarter, which marked the onset of the pandemic-induced economic downturn.
Despite increased optimism, CFOs still report their companies being below their pre-COVID levels of revenue and employment. Additionally, CFOs still anticipate a full recovery to be months, if not years, away.
Separately, almost 40% of respondents said they were likely to revert to pre-COVID levels of remote work.
"More than 60% of respondents [said] revenue projections have not returned to their pre-COVID mark and about 40% report lower employment," Fuqua School of Business finance professor John Graham said. "Moreover, only about one-quarter of the firms below pre-COVID levels anticipated a full revenue or employment recovery by June 2021."
CFOs also said their firms have continued limiting spending and investment; more than half said they had either somewhat or significantly decreased spending in the third quarter.
"Measures of uncertainty remain elevated and we can see that reflected in the decision by many firms not to invest in capital," Brent Meyer, senior policy advisor at the Federal Reserve Bank of Atlanta, said.
CFOs predict continued slow GDP growth over the next four quarters, averaging about 2.2%. They cited their most pressing concerns as their own company's demand, sales or revenues, as well as labor availability, broad economic health and the political climate.
"The economy is recovering, to be sure, and business confidence has improved since the spring," Federal Reserve Bank of Richmond Vice President Sonya Ravindranath Waddell said. "But all indicators from The CFO Survey point towards a slow return to normal that is challenging to forecast due to the uncertainty created by this virus."