CFO confidence in the economy is growing as the U.S. prepares for a second Trump administration. As businesses anticipate new tax plans, potential reductions in the size of the federal government and regulatory changes, finance chiefs across industries are likely to strategize how the new administration will impact their operations.

Despite the anticipated changes and a general tendency for uncertainty, CFO confidence is climbing. According to the latest CFO survey by Duke University and the Federal Reserve Banks of Richmond and Atlanta, CFO optimism regarding the economy rose to 65.9 out of 100, a five-point increase from the Q3 report. Survey respondents attribute the rise largely to the election’s outcome.

Primary concern shifts

Now that the election has concluded, data indicates CFO concerns about monetary policy have declined. The most pressing concern now is labor quality and availability, followed by monetary policy and inflation. Concerns about the political climate have risen significantly, likely due to the uncertainty surrounding the period leading up to Inauguration Day and the initial effects of the new administration’s policies.

Likely due to Trump’s plan to implement tariffs, CFO concern in this area has risen considerably, though it remains a secondary issue. The share of total mentions regarding trade and tariffs increased by 2.6 points and is expected to continue rising in the next survey for Q1 2025.

Organizational performance results and expectations

Revenue expectations have slightly increased, from 4.9% to 5.6% quarter-over-quarter. This could be attributed to increased spending, as only 41% of CFOs reported boosting expenditures in areas excluding capital expenditures — a figure down from 44.6% in Q3.

Looking ahead to 2025, CFOs expect increases in revenue and pricing but anticipate declines in unit costs, employment, and average wages. The latter is particularly surprising, as the Fed and business leaders have emphasized the need for wage growth to mitigate inflation’s impact on consumers.

CFOs also expressed greater confidence in the U.S. stock market, predicting the record-breaking S&P 500 will continue to rise. They forecast an annual return of 7.1% over the next 12 months, with a best-case scenario of 13.4% returns and a worst-case scenario of a 2.7% decline.