Economic optimism among chief financial officers dropped in the first quarter of 2025 amid concerns about tariffs and broader economic uncertainty, according to the CFO Survey, a collaboration of Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta. 

The economic optimism index fell from 66.0 in the fourth quarter of 2024 to 62.1 in the first quarter of 2025, almost erasing gains from a post-election jump. CFOs’ optimism about their own firm’s financial prospects also dipped, although not nearly as much, according to the survey, which was fielded from Feb. 18 to March 7, 2025.

Almost a third of the 400 responding firms reported concerns about trade policy or tariffs in the first quarter — a sharp increase from the fourth quarter of last year. In addition, “uncertainty” was in the top five respondent concerns. 

“Uncertainty and trade policy were clearly on the minds of CFOs in the first quarter CFO Survey,” said Sonya Ravindranath Waddell, vice president and economist with the Federal Reserve Bank of Richmond. “Not only did almost one-third of respondents report concerns about tariffs, but those respondents had notably lower optimism, lower expectations for GDP growth, lower expectations for revenue and employment growth, and higher expectations for price growth in 2025.”

Some firms reported direct effects of tariffs. One commercial builder noted that, “Tariffs are a major concern … the potential cost escalation of imported raw materials will negatively impact us.” Another reported that, “Tariffs … are causing price increases in steel, which will directly impact our gross profit.” 

Some firms focused on the uncertainty around tariff policy. “Lumber tariffs … could help or hurt our company,” one said. “Unpredictability … makes it very difficult to plan as a business.” Another respondent expressed concern about the “uncertainty over the impacts of potential tariffs and resulting slower corporate decision making.” 

About a quarter of firms reported that changes to trade policy would negatively impact their hiring and their capital spending plans in 2025. Some CFOs intended to take some action: On the sourcing side, almost 30 percent of firms planned to diversify supply chains, 20 percent moved up purchases, and there were some reports of finding new domestic or foreign suppliers.

Next to tariffs and trade policy, changes in regulatory policy seemed most likely to affect hiring and capital spending plans, both positively and negatively. Only a few firms reported altering plans due to changes to immigration or corporate tax policy.

Despite concerns about the overall economy, CFOs’ expectations for their own firm’s performance did not change considerably. Own-firm optimism fell from 71.3 to 68.4, not nearly as much as economic optimism. Employment growth expectations declined, but expectations for revenue growth, unit cost growth, wage growth, and price growth were relatively steady from last quarter. 

The CFO Survey is issued by Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta. The latest survey, as well as historical data and a detailed analysis of the impact of the election on the corporate outlook, can be found at www.cfosurvey.org. Sign up to receive email notifications when new results are posted.