A rising variety of US companies are holding off on main investments till they know the end result of the upcoming presidential election.
Some 30% of companies have postponed, scaled down or canceled funding plans due to uncertainty across the election, up from 28% final quarter, based on the most recent CFO Survey of economic professionals revealed Wednesday by the Federal Reserve Banks of Atlanta and Richmond and Duke College’s Fuqua Faculty of Enterprise.
“Relative to their non-impacted friends, impacted companies are much less optimistic, are much less more likely to put money into increasing or sustaining capability however extra more likely to put money into value discount, and anticipate slower income and employment progress in 2024,” Atlanta Fed researchers Brent Meyer and Daniel Weitz wrote in a weblog publish.
The share of firms taking a couple of step to hunker down forward of the election additionally rose to 11% from 6% within the second quarter, the survey that closed Sept. 6 discovered.
Companies that anticipate to cut back funding are also bracing for decrease income and employment progress this yr in comparison with their friends, the survey confirmed. Whereas they see income and employment returning to ranges on par with non-impacted companies in 2025, they don’t anticipate to catch as much as them. As a substitute, they anticipate to “completely lose” 1 to 2 share factors of progress this yr, the report confirmed.
The findings match anecdotal proof suggesting the election is preserving many companies in limbo. The vote is being talked about in company earnings calls “earlier and extra abruptly” than it has been in earlier elections, based on an evaluation by Goldman Sachs.
Executives in nearly one in 5 earnings calls talked about “election” within the second quarter, the Wall Road financial institution discovered. That’s up greater than 5 share factors from the identical durations in 2020 and 2016, based on Goldman.
