American businesses are poised to slow or freeze hiring as they grow increasingly worried about the economic outlook, according to a Deloitte survey of chief financial officers.
Expectations for growth in earnings, employment and wages are down in the latest edition of the quarterly poll, compared with the previous one, as corporate chiefs turn defensive. More than half of CFOs said they’ve been told by their chief executive to focus on cost reductions.
On average, hiring expectations have declined from from 5.3% annual payroll growth a year ago to 1.4% now. And the outlook is even worse based on the median survey response, which fell to zero — meaning that fewer than half of CFOs expect employment at their firm to expand over the coming year, a level unseen since the acute initial phase of the pandemic in 2020.
More than four in five CFOs say the economy is the most worrisome external risk they now face, while key concerns of the past couple of years such as tight labor markets and snarled supply chains have dropped down the list. Geopolitical threats ranked second, followed by social media, perhaps reflecting the danger of negative publicity spreading online.
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About one-third of CFOs say it’s a good time to take a risk — some 10 percentage points below the two-year average.
“The decrease in some CFOs’ risk appetite could reflect their reluctance to take on new risks amid continued high inflation, rising interest rates, uncertainty in the markets, and geopolitical instability,” Deloitte analysts wrote.
The latest Deloitte survey interviewed 122 finance officers between May 1-15.
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