Key Findings

  • PwC, citing a survey, said on Wednesday that 71% of C-suite executives believe that trade and tax policies after the election, regardless of the outcome of the November 5 presidential election, will harm U.S. competitiveness.
  • About three-quarters (76%) of executives expect the election to result in a divided government, and three-fifths (61%) predict the economy will enter a recession in the next six months, up from 49% in June. PwC surveyed 709 CFOs, CEOs, and other C-suite executives from September 12 to 19.
  • Cybersecurity risk remains the top risk, cited by 75% of executives, followed closely by margin pressure, an unclear economic outlook, and geopolitical turmoil. Tyson Cornell, head of PwC's U.S. advisory business, said in a statement: "Executives are navigating an increasingly complex and volatile business environment, and the upcoming election adds further complexity."

Deeper Insights

The unpredictability of the presidential election outcome has prompted CFOs and other leaders across industries and company sizes to scale back expectations and delay investments, as shown by several recent surveys.

"Uncertainty is at historic highs," the National Federation of Independent Business (NFIB) said on Tuesday. U.S. small businesses find it harder to predict the business environment over the next six months than at any time since the federation began measuring their outlook 38 years ago.

"Once the election outcome is known, businesses will adjust their plans," the NFIB said in its monthly survey report. "In a few weeks, the outlook for Main Street businesses will become clearer."

Large businesses also face an unclear future. The Federal Reserve Banks of Richmond and Atlanta said on September 25, citing a quarterly survey, that about one-third of CFOs have delayed, reduced, or canceled investment plans due to difficulty assessing the election's impact on regulation, taxes, and other policies.

Although CFO optimism about the economy declined compared with the second-quarter survey, they expect inflation to cool and forecast revenue and employment growth in the third quarter. The two regional Fed banks said the survey was conducted in partnership with Duke University's Fuqua School of Business.

Deloitte found in its quarterly survey released in late September that CFOs' risk aversion has reached its highest level since 2009, with major concerns including inflation, the economic outlook, overseas conflicts, and potential election outcomes.

S&P Global Market Intelligence recently said that the unclear political outlook has weighed on demand, hiring, investment, and business confidence. S&P Global Ratings forecasts that economic growth next year will slow to 1.8% from 2.7% in 2024, noting that capital costs and recent "policy uncertainty" will curb capital expenditure and hiring.

PwC said that three-quarters of executives believe that former President Trump's proposed 10% universal tariff on imported goods would severely harm their companies' growth.

The same proportion of respondents said they would significantly cut their investments in the U.S. if the 28% corporate tax rate supported by Vice President Harris takes effect. PwC said: "Executives see taxes and climate as major risks under Harris's policies, and trade and foreign relations as major risks under Trump's policies."

Regardless of who wins the White House, 77% of executives expect an increase in executive orders, and 75% expect more regulation and litigation. PwC said: "Executives believe that economic, political, and regulatory risks will persist no matter who wins the 2024 U.S. presidential election. Uncertainty, volatility, complexity, and risk—leading a company right now is difficult."