CFO survey paints grim picture of US capex plans
Results challenge signals coming from regional Fed surveys
The June Duke CFO survey showed uncertainty regarding regulatory policy and health care costs have put a damper on capex plans for the next 12 months.
Deutsche Bank economist Mathew Luzzetti noted that capex plans are highly correlated with actual capex spending, as shown in chart, and that the survey results conflict with regional Fed surveys.
Key findings from the survey:
- 36% of CFOs say their firm currently faces more uncertainty than normal about the economic outlook and governmental policies. 58% say the level of uncertainty is normal.
- Among the 36%, about 60% say that they are delaying or proceeding more slowly on expansion plans in response.
- The top four items about which uncertainty is causing firms to proceed slowly or delay are listed next (with the most common action taken in response in parentheses):
- Health care policy (delay hiring new employees in general, except perhaps to deal with specifics of health regulations)
- Regulatory policy (wait and see, delay until dust settles)
- Economic growth (delay investment, reduce hiring)
- Tax policy (delay investment)