June 20, 2024
Chief monetary officers’ optimism relating to the US financial system within the second quarter remained unchanged from the primary, in response to The CFO Survey launched right this moment by the Federal Reserve Financial institution of Richmond, Virginia. Wage invoice expectations jumped barely, as did employment expectations.
On a scale of 0 to 100, CFOs rated their optimism as 60.6 within the new survey, unchanged from the extent of optimism within the prior survey.
CFOs additionally revised downward their expectations for actual GDP progress over the subsequent 4 quarters to 1.8%, down from 2.2% within the prior survey. As well as, the chance of damaging financial progress rose to 12.6% within the present report from 10% final quarter.
The CFO Survey report famous median anticipated full-time employment progress for subsequent 12 months stands at 2.4% for subsequent 12 months, down barely from the two.5% forecast within the first quarter. Wage invoice progress is predicted to stay at median 4.0% for each this 12 months and in 2025.
By way of income, median income progress is predicted to stay regular at 5.0% subsequent 12 months; median worth and unit prices progress are anticipated to be 3%.
The survey additionally queried about automation and AI. Practically two-thirds of CFOs surveyed reported their firms have a strategic precedence to automate duties usually carried out by staff. Amongst corporations that plan to automate within the subsequent 12 months, a majority count on to implement AI to carry out a variety of duties.
Corporations indicated that they use automation to extend product high quality, cited by 58% of corporations; improve output, 49%; scale back labor prices, 47%; and substitute for employees, 33%. Among the many group of firms which have automated, 37% of corporations (55% of huge corporations) particularly say they’ve already carried out AI.
“CFOs say their corporations are tapping AI to automate a bunch of duties, from paying suppliers, invoicing, procurement, monetary reporting and optimizing services utilization,” mentioned Duke finance professor John Graham, educational director of the survey. “That is on prime of firms utilizing ChatGPT to generate artistic concepts and to draft job descriptions, contracts, advertising plans and press releases.”
Responding to a particular query in the newest survey, practically one-third of CFOs indicated that due to uncertainty in regards to the upcoming election, their firms are suspending, cutting down, delaying or completely canceling funding.
The report relies on The CFO Survey performed between Could 13 and June 3. It’s a collaboration of the Federal Reserve Banks of Richmond and Atlanta and Duke College’s Fuqua College of Enterprise.