CFO Survey: Pending Tax Reform Prompts Spike in Business Optimism

Survey led by Professor John Graham also explores work-life balance

December 13, 2017
Finance, Taxes & Trade


Pending tax reform in the United States has optimism among chief financial officers at record levels, while CFOs spend two-thirds of their waking hours working and would prefer to be on the job much less than that, according to a new survey.

The Duke University/CFO Global Business Outlook also finds the difficulty that companies are having hiring and retaining qualified employees is at a 20-year high, and that in part will lead to higher wages. The survey has been conducted for 87 consecutive quarters and spans the globe, making it the world's longest-running and most comprehensive research on senior finance executives. This quarter, more than 800 CFOs responded to the survey, which ended Dec. 8. Results are for the U.S. unless stated otherwise.

Work-life balance

The survey suggests finance chiefs work nearly 70 percent of the hours they are awake,” said John Graham, a finance professor at Duke’s Fuqua School of Business and director of the survey. “At the same time, the CFOs say the ideal work-life balance would involve working closer to 50 percent of waking hours.”

The preference to work fewer hours is pervasive, regardless of the current number of hours worked. Most CFOs who work 80 percent of waking hours would prefer to work between 50 and 60 percent, while CFOs who currently work 50 percent of waking hours would prefer to work 40 percent or fewer.

“The role of the CFO has widened over the last two decades,” Graham said. “CFOs are accountable for the bottom line as well as helping shape corporate strategy. One hopes that finance chiefs are not overworking themselves to the point of jeopardizing their health, which in turn could put the financial health of the company at risk.”

These trends hold across industries and around the world. The typical Asian CFO works 73 percent of his or her waking hours, slightly higher than CFOs in Europe (72), Africa (70) and Latin America (69). CFOs from all regions indicate they would prefer to work about 20 percent fewer waking hours per week.

Optimism Remains Strong

The Optimism Index in the U.S. increased to 69 on a 100-point scale this quarter. Among CFOs who responded to the survey after the Senate passed its version of the tax reform bill, optimism spiked to 73, which is the highest U.S. optimism ever recorded in the history of the survey.

“The extremely high level of business optimism is tied to the long-awaited corporate tax reform currently moving through Congress,” Graham said. “More broadly, optimism is up around the world. Our analysis of past results shows the CFO Optimism Index is an accurate predictor of future economic growth and hiring; therefore, 2018 looks to be a very promising year for the world economy.”

Rapid pace of innovation

Sixty-two percent of CFOs indicate the pace of innovation at their firms has grown faster in the past three years. Among these companies, 63 percent indicate the rapid pace of change has caused their firms to focus more on the near-term, and 40 percent say they now choose projects with shorter lives.

“Given the acceleration in innovation, firms don’t want to be shackled by longer-term investments, especially in technology that can quickly become obsolete,” said Cam Harvey, a founding director of the survey, who teaches an innovation course at Fuqua. “You expect companies to pivot, and shorter-term projects allow for flexibility and speed.”

Among these firms, 76 percent indicate their capital spending has increased as a result of more rapid innovation. Forty-six percent say they have increased research and development in response, with 31 percent saying it has spurred them to tackle ambitious “moonshot” projects.

Tight labor market, top concerns

The proportion of firms indicating they are having difficulty hiring and retaining qualified employees is at a two-decade high, with 43 percent of CFOs calling it a top concern. The median U.S. firm says it plans to increase employment by about 2 percent in 2018.

“The labor market continues to tighten,” said Chris Schmidt, senior editor at CFO Research.

“Firms are finding it harder to hire qualified employees with the skill sets they seek. There are indications of shortages of both management talent and skilled jobs such as diesel mechanics, tech engineers, and sales and service positions.”

Due in part to the tight labor market, U.S. companies expect to pay higher wages, with median wage growth of about 3 percent over the next 12 months. Wage growth should be strongest in the tech, energy and retail/wholesale industries.

After the labor market, the next largest concern among U.S. CFOs is the cost of benefits, with health care costs expected to rise by more than 8 percent next year. Nearly half of U.S. companies indicate that the cost of employee health benefits crowds out their ability to spend on long-term corporate investment. Data security issues rose to 3rd on the list of top concerns, its highest ranking ever.

Global results

Canadian optimism remains strong at 64. Capital spending should increase by about 4 percent and employment by about 2 percent in 2018.

Optimism in Europe jumped to 67 this quarter, the highest level in a dozen years. The UK has the lowest optimism among responding European countries, at 58.

Capital spending is expected to grow 4.8 percent in 2018, and median employment should grow 1 percent. For the second consecutive quarter, and only the second time ever, the top concern among European CFOs is attracting and retaining qualified employees, followed by regulatory requirements, government policies and data security. Nearly 60 percent of European companies say the pace of change and innovation has quickened in the past three years.

Of these companies, three-fourths indicate they have increased capital spending in response, and nearly two-thirds have increased R&D. Fifty-five percent of European CFOs say their firms focus more on the early years of the planning horizon because of the fast pace of innovation. Less than one-third indicate they now require a shorter payback period or have shortened the horizon of their investments, the smallest percentage in the world.

Optimism is also strong in Asia, at 66. Difficulty attracting employees, economic uncertainty and regulation and government policies are top concerns. Median 5 percent growth in capital spending and 2 percent employment growth are expected in 2018. Nearly three-fourths of Asian firms indicate the pace of innovation has quickened over the past three years.

Among these firms, 71 percent say they have increased capital spending in response, 65 percent have increased R&D spending, and 56 percent have increased moonshot projects. Eighty-six percent of Asian firms indicate the fast pace of change has led them to focus more on the early years in their planning horizons, and 55 percent have formally reduced the length of their long-range plan. Forty-three percent of companies indicate spending on shorter-term projects has crowded out spending on long-term projects, and 43 percent say regulations stifle long-range spending.

Latin American optimism continues to rebound in most countries, up to 73 in Mexico, 71 in Peru and 61 in Brazil. In stark contrast, optimism is only 28 in Ecuador. Economic uncertainty is the top concern among Latin American CFOs, with 62 percent of firms listing it as a top four concern. They are also concerned about governmental policies, weak demand and productivity. Median capital spending growth will be 5 percent, while median employment will be flat in 2018.

Sixty-three percent of Latin American CFOs indicate the pace of innovation has increased in the past three years. Among these firms, two-thirds have increased capital spending and 52 percent have increased R&D in response, and 40 percent have increased spending on moonshot projects. Sixty-five percent of Latin firms indicate the fast pace of change has led them to focus more on the early years of their planning horizons, and 55 percent have formally reduced the length of their long-range plan. Corporate taxes and regulations are the two factors that most hinder long-term spending in Latin America.

Business optimism in Africa increased 1 point to 53 this quarter, still the lowest in the world. Capital spending should increase by about 1 percent, and employment by 3 percent, in 2018. The biggest concerns for African CFOs are economic uncertainty, governmental policies and currency risk. Seventy-one percent of African CFOs say the pace of innovation has quickened, and among these firms 85 percent say they have increased capital spending in response and 62 percent have increased R&D. Nearly two-thirds of African companies indicate the rapid pace of change has led their firms to focus more on the short-term. Fifty-five percent say adhering to regulations crowds out long-term corporate investment.

                        _ _ _ _ _ _

Detailed results, including tabular summaries of the numbers in this release and results from previous surveys, are availableat

About the survey: This is the 87th consecutive quarter the Duke University/CFO Global Business Outlook survey has been conducted. The survey concluded Dec. 8, and generated responses from more than 800 CFOs, including nearly 300 from North America, nearly 100 from Asia, 148 from Europe, 215 from Latin America and 55 from Africa. The survey of European CFOs was conducted jointly with TiasNimbas in the Netherlands (, the France CFO society, and at GEM. The survey of Latin America was conducted jointly with Fundação Getúlio Vargas (FGV) in Brazil ( and with Universidad Andina Simon Bolivar in Ecuador. The Japanese survey was conducted jointly with Kobe University ( and Tokyo Institute of Technology, among others. The African survey was conducted jointly with SAICA (

The Duke University/CFO Global Business Outlook survey polls a wide range of companies (public and private, small and large, many industries, etc.), with the distribution of responding firm characteristics presented in online tables. The responses are representative of the population of CFOs that are surveyed. Among the industries represented in the survey are retail/wholesale, mining/construction, manufacturing, transportation/energy, communications/media, technology, service/consulting and banking/finance/insurance. The average growth rates are weighted by revenues or number of employees. For example, one $5 billion company affects an average as much as 10 $500-million firms would. Revenue-weighted mean growth rates are provided for earnings, revenues, capital spending, technology spending and prices of products. Employee-weighted mean growth rates are used for health care costs, productivity, number of employees and outsourced employment. The earnings, dividends, share repurchases and cash on balance sheet are for public companies only. Unless noted, all other numbers are for all companies, including private companies. 

This story may not be republished without permission from Duke University's Fuqua School of Business. Please contact for additional information.

Contact Info

For more information contact our media relations team at