Almost half of U.S. financial managers are slashing hiring or spending plans as political uncertainty weighs on the business outlook during the election year, according to a survey released Wednesday.
Forty-seven percent of U.S. firms reported pulling back on employment or investment, according to the quarterly Duke University/CFO Global Business Outlook poll.
About eight in 10 chief financial officers said the U.S. economy faces moderate-to-large political risk due to election uncertainty, "Washington dysfunction" and regulations including proposed minimum-wage increases, according to the report, which is done in conjunction with CFO Magazine. Almost 40% of the U.S. CFOs said they believed foreign companies were less willing to do business with the U.S. because of the cloudy political atmosphere.
The report included moderately encouraging news for some U.S. workers, as companies ranked the difficulty hiring and retaining skilled employees as their second-biggest concern, up from fifth last year. While payroll gains have cooled, this tightness in the market could cause wage pressures to bubble up, said Campbell R. Harvey, a professor at the Duke University Fuqua School of Business and a founding director of the survey.
“The tight labor market, combined with a skills mismatch between what companies want and what they can get, makes wage inflation inevitable,” Harvey said in a statement.
The survey also revealed an international divide on financial chiefs’ attitudes toward trade deals, with 54% in the U.S. expressing confidence in the economic benefits of such pacts, compared with about two-thirds of CFOs outside the U.S.
The European CFOs polled saw a 42% probability that the U.K. will vote June 23 to leave the European Union, the survey showed.
The survey, which concluded June 3, polled more than 1,200 CFOs, including 626 from the U.S., according to the group.