Political uncertainty is weighing heavily on U.S. businesses.
Forty-seven percent of chief financial officers say their companies will rein in spending or hiring because they are concerned about the nation’s political situation, according to the latest CFO survey by Duke University. Those worries include the upcoming elections, gridlock in the nation’s capital and proposed regulations, such as changes in the minimum wage.
Of those polled, 34 percent said the political risk is large and 45 percent rated the risk as moderate.
“Companies take a big pause in the face of severe political risk, delaying or scaling down business spending plans until the risk dissipates,” John Graham, director of the survey and a finance professor at Duke’s Fuqua School of Business, said in a statement.
Thirty-eight percent of the CFOs reported that, in their estimation, foreign companies are wary of doing business with U.S. companies because of the political risks.
Over the next 12 months, CFOs expect their businesses to boost their workforces by 2 percent. Wages are expected to rise by 3.3 percent, which would significantly outpace the expected rate of inflation.
Duke survey 626 CFOs across the U.S. in its latest quarterly survey.