DURHAM, N.C. -- Capital spending and hiring will slow over the next year due to higher fuel, borrowing and health care costs, corporate financial executives said in a survey released Thursday.
Fewer U.S. chief financial officers are optimistic about the economy than last quarter, according to the Duke University/CFO Magazine Business Outlook survey.
Forty percent of CFOs said they saw better days ahead, down from 46 percent who were more optimistic last quarter, 54 percent who were more optimistic two quarters ago and 70 percent who were more optimistic a year ago.
"This is a new low for CFO optimism," said John Graham, a Duke finance professor who directs the survey. "We've found that this optimism index predicts future economic growth quite well. In a situation like this, where the optimists barely outweigh the pessimists, we can expect to see sluggish economic growth."
The survey, concluded Monday, generated responses from 602 CFOs, including 365 from the United States, 153 from Asia and 84 from Europe.
Not only do U.S. CFOs list rising interest rates as one of their top current concerns, they say additional interest rate increases will slow U.S. economic growth.
"The Fed has raised interest rates eight times with no impact on the economy. The CFOs are telling us that the next volley of rate increases will do some damage to GDP growth," said Duke finance professor Campbell R. Harvey, founding director of the survey.
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