By Howard Schneider
WASHINGTON (Reuters) – Nearly a third of company financial officers say that risks around the Nov. 5 U.S. presidential election have caused them to delay or scale back investment plans, a potential blow at least in the short-term to economic growth.
In a nationwide survey conducted jointly by the Atlanta and Richmond Federal Reserve Banks and Duke University’s Fuqua School of Business, 21% of 479 responding chief financial officers said their companies had postponed investments due to “uncertainty related to the upcoming U.S. Presidential and Congressional elections.”
Slightly more than 15% said they had scaled down their plans.
Firms were allowed to pick more than one answer, so the categories may overlap, but an overall 30% said election-related uncertainty had hit investment plans in some way. Just over 64% said there was no impact.
Atlanta Fed economist Meyer and survey director Daniel Weitz said the firms most affected by election uncertainty tended to be less optimistic about the outlook and were less likely to invest for the purpose of increasing capacity or replacing and/or repairing existing assets. These firms were also more likely to invest in equipment and structures/land for cost-reduction purposes.”
Those companies also did not expect to make up slower growth this year in 2025, Meyer and Weitz wrote.
The survey, which is conducted quarterly, did show CFOs overall remained optimistic, with 69% of respondents saying they were bullish on their own company and 60% on the U.S. economy overall. The results to both questions were about the same as in the second quarter.
But the findings also suggested that for a significant share of firms, the country’s combative politics and the stark choice between Vice President Kamala Harris, the Democratic presidential candidate, and former President Donald Trump, the Republican challenger, had moved money to the sidelines.
The survey did not ask any questions of a partisan nature to try to understand whether CFOs regarded Harris or Trump as better for the economy or their businesses.
But given a list of policy topics, about 60% said that in the context of the Nov. 5 vote, “regulatory policy” was their chief concern, while around 59% cited monetary policy and 54% said it was corporate tax policy.
Monetary policy has been at the top of the CFO worry list for more than a year, a period that coincided with the Fed’s determination to keep interest rates in restrictive territory to tame high inflation. The U.S. central bank began cutting rates last week.
Inflation has fallen down the list of CFO concerns, with only 8% citing it as the top concern.