Duke Survey: Politics Will Dampen Business Spending Even After Election

Sep 16, 2016

According to a Duke Fuqua survey, CFOs say they will hold off on business investments even after the election.
Credit U.S. Embassy and Gage Skidmore / flickr

This year, political uncertainty could dampen business investment even after the outcome of the election isn’t uncertain.

According to the latest latest Duke University/CFO Global Business Outlook survey, as many as one-third of chief financial officers will hold back on investment even after the election. It’s not uncommon for businesses to slow spending before an election, particularly before a presidential election, but that investing tends to normalize again not long after early November.

"It is surprising to hear a fair number of business leaders say they will continue to wait and see after the election, until it becomes clearer how the new president and Congress will lead," said John Graham, a finance professor at Duke's Fuqua School of Business and director of the survey. "We're accustomed to seeing investment falling in the September before an election, but that uncertainty usually dissipates on Election Day and investment levels return to normal in December. This year, the dampening effect of political uncertainty will continue past Election Day."

In comparing candidates, 40 percent of CFOs said they will hold off on investment if Hillary Clinton is elected while 33 percent said the same about Donald Trump. Other findings include:

  • About 26 percent of all U.S. firms said they are already delaying investment because of the election.
  • Among the majority of firms not currently delaying investment because of the election, about one quarter said they would change course and delay investment plans if Clinton was elected, and another quarter said they would do the same if Trump wins.