CFO Survey: Labor Markets Tighten; Stock Market Still Overvalued

September 10, 2015
Finance, Management


Nearly half of U.S. firms say they are struggling to fill job openings in key positions and plan to increase wages more than 3 percent in the coming year, according to a new survey. And even after recent market corrections, 55 percent of U.S. companies say they think the stock market is overvalued.

The latest Duke University/CFO Global Business Outlook also explores risk management and business optimism.

The survey, which ended Sept. 4, has been conducted for 78 consecutive quarters and spans the globe, making it the world's longest-running and most comprehensive research on senior finance executives. Results are for U.S. firms unless otherwise noted.

Employment and Wages

Ninety-three percent of U.S. companies say they have job openings in key positions and nearly half of these firms say it is difficult to fill these slots. CFOs list the difficulty in attracting and retaining qualified employees as one of their top three overall business concerns.
U.S. firms expect to hike wages 3.3 percent over the next year, with wage growth strongest in services, consulting and construction.

"CFOs say they are increasing wages in response to labor market pressures and difficulty finding key workers," said John Graham, a finance professor at Duke's Fuqua School of Business and director of the survey. "Employment should continue to increase over the next year but at a somewhat slower pace. All else equal, we expect the unemployment rate to remain relatively constant."

Employment is expected to shrink over the next year in the finance, energy and agriculture industries.

Stock Market Still Overvalued

Even after the recent correction in the stock market, more than half of U.S. CFOs believe the market is still overvalued.

"CFOs are very bearish on the U.S. market," said Fuqua professor Campbell R. Harvey, a founding director of the survey. "Our survey took place during a volatile time where there was a 10 percent market correction. Even after this drawdown, 55 percent of CFOs thought the market was overvalued."

Risk Management Concerns

Though economic uncertainty is the top business concern across much of the globe, CFOs are worried that companies are not adequately managing risk. Almost half (44 percent) of financial executives believe firms in their own industries have become complacent about managing downside risk.

"It is especially troubling that a greater proportion, 55 percent, of CFOs in the banking industry believe their industry has become complacent about managing risk," Harvey said.

Global Economic Outlook

CFO optimism about the U.S. economy has weakened but remains the strongest in the world. On a scale from zero to 100, financial executives rate the outlook at 60, down from 65 in the spring and 63 last quarter. As a result, business plans will soften somewhat. Capital spending is expected to increase only 2.4 percent at U.S. companies and earnings will rise only 3 percent. Merger and acquisition activity will continue, with the deals funded primarily by cash and debt.

"Finance executives are eager to help their companies start building again," said David W. Owens, editorial director for CFO Research, "but they feel some drag from continuing uncertainties about government actions and consumer reluctance at home, and about economic conditions overseas, especially in China."

Canadian optimism mirrors the U.S. at 60. Canadian CFOs expect median employment growth of 1 percent and capital spending growth of 5 percent.
In Europe, optimism slipped to 58 on a 100 point scale, down from 60 last quarter, but Europe continues to solidify. Capital spending is expected to increase 5.8 percent and full-time employment should rise 4 percent. Wages should grow by 3 percent. European top concerns include economic uncertainty, currency risk and weak demand.

For the first time in at least a decade, optimism is lower in all emerging regions than in North America and Europe. Asian optimism fell to 56, down from 63 last quarter. Capital spending will be flat in Asia and full-time employment will fall. Wages are expected to rise by about 5 percent across Asia. Top concerns include economic uncertainty, weak demand and currency risk. Asia will be the most active region in M&A, with firms attempting to diversify product lines and geography, and improve position within their industries.

African optimism increased to 48 this quarter, up from 43 last quarter. Employment will increase 1 percent, and wages are expected to rise by about 8 percent over the next 12 months. Capital spending will fall. African CFOs are worried about a host of issues, especially currency risk, economic uncertainty, government policies and the reliability and cost of electricity.

Latin American economic optimism plummeted to 43 on a 100-point scale. Brazil stayed at 37, Chile fell to 39. Peru has an optimism index of 55 and Uruguay 50. Full-time employment is expected to contract 1 percent and median capital spending will not change.

Mexico remains a bright spot in Latin America, with optimism of 58. Mexican firms expect to increase employment by 2.7 percent and capital spending by 1.2 percent. Seventy-three percent of Mexican companies say that it is difficult to fill key positions.

Presidential Candidates Rated (released Sept. 4)

Donald Trump leads the list of presidential candidates CFOs rated as best for business, followed by Carly Fiorina.

No single candidate received majority support. Nearly one in five U.S. CFOs (19.4 percent) said Trump would be best for their businesses, followed by 14.1 percent who favored Fiorina. Jeb Bush followed closely with 13.9 percent.
                                                _  _  _  _  _  _

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

About the survey: This is the 78th consecutive quarter the Duke University/CFO Global Business Outlook survey has been conducted. The survey concluded Sept. 4, and generated responses from more than 1,200 CFOs, including 510 from the U.S., 64 from Canada, 130 from Asia, 150 from Europe, 303 from Latin America and 18 from Africa. The survey of European CFOs was conducted jointly with TiasNimbas in the Netherlands ( and ACCA, based in the U.K. 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/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