CFO OUTLOOK FOR 2026: TARIFFS, HIRING, PRICES, AND AI IMPACT

The following information was released by the Federal Reserve Bank of Richmond:

CFOsremainconcerned about tariffs and anticipate price increases of more than 3 percent in 2026, while expecting moderate growth in employment andoveralleconomic activity. Widespread increases in AI-related spending are expected, particularly among small firms. These findings are from The CFO Survey, a collaboration of Duke Universitys Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta. This quarter, 548 respondents were polled in a survey that ran from Nov. 11 to Dec. 1.

The top concern among U.S. CFOs remains tariffs, though their extent of concern is smaller than it was last quarter. Other top five concerns include demand for products and services, labor quality and skills mismatch, monetary policy, and inflation.

Last quarter, we learned that CFOs expected the upward pressure from tariffs on prices to continue into 2026, said John Graham, a Duke Fuqua School of Business finance professor and the academic director of the survey. In this quarters survey, we find evidence of continued high price growth, with the median firm expecting the prices of their products and services to increase by 3.5 percent in 2026.

The median company expects to increase their number of full-time employees by 1.7 percent in 2026, about the same rate of growth reported in recent surveys. More broadly, 15 percent of companies plan to reduce their number of employees, 26 percent plan to keep employment flat, and 59 percent expect to increase their workforce. Wages are expected to rise by about 3 percent.

Real GDP growth is expected to increase by 1.9 percent in 2026, nearly the same as last quarters 12-month-ahead forecast. The CFO Optimism Index for the overall economy has softened somewhat, falling from 62.9 last quarter to 60.2 this quarter (on a scale from 0 to 100). Own-firm optimism has fallen among large companies.

Nearly 78 percent of large companies (500 or more employees) invested in AI during 2025, much higher than the 48 percent of small companies that invested in the past year. The proportion of small firms investing in AI will greatly increase in 2026, with approximately 80 percent of small firms investing in AI next year. CFOs expect AI to increase worker productivity, enhance decision speed and accuracy, improve customer satisfaction, and enable employees to refocus their time on higher-value tasks. AI investment is not expected to have much effect on the number of employees or produce measurable cost savings in 2026.

The CFO Survey is issued by Duke Universitys Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta. The latest survey, as well as historical data, can be found atwww.cfosurvey.org. Sign up to receive email notifications when new results are posted.

As part of our nations central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency thats fit for distribution, and provide a safe and efficient way to transfer funds through our nations payments system.

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