Fed Survey: Businesses Now Face More Uncertainty Than Before Pandemic
According to the latest Survey of Business Uncertainty, firms are now more uncertain about their prospects than they were before the pandemic.
The December survey, which is conducted monthly by the Federal Reserve Bank of Atlanta, found that despite the uncertainty, companies’ expectations for sales revenue growth grew in recent months.
In addition, businesses were more optimistic about expected employment growth, while uncertainty about employment growth reached pre-pandemic levels, the survey found.
PYMNTS has studied the toll that uncertainty can take on businesses.
According to PYMNTS Intelligence research, as detailed in “The 2024 Certainty Project Report,” uncertainty cost firms an average of 4.4% of their revenues. Over a third of middle-market company leaders said that business uncertainty has led to missed opportunities. Meanwhile, uncertainty about customer demand led to a 7% revenue loss. PYMNTS Intelligence also found that firms whose biggest source of uncertainty was supply chain challenges lost an average of $11 million, or 3.8% of revenue.
To solve this pain point, 75% of CFOs surveyed by PYMNTS said they turned to data collection and analytics in a bid to better navigate uncertainty. Notably, more CFOs said they relied on this method than the 44% who turned to process automation.
“In particular, 63% of firms have turned to using analytics to predict customer demand behavior,” PYMNTS wrote in the report. “To compare, 72% have used trend forecasting to reduce uncertainty in their competitive position, such as speed to market.”
CFOs are also looking to optimize their accounts receivable departments by bolstering predictability. Their strategies include expanding and training their staff, upgrading software and using process automation, according to the report, which found that 25% of finance executives took these actions in the month before the survey.
PYMNTS also sat down with 18 payments executives to discuss how companies can use data to stay ahead of the competition in an uncertain economic environment, collated in PYMNTS’ Q1 eBook, “The Implications of Uncertainty.”
“The best laid plans are only as effective as the tools you have to implement them,” Mariana Lamson, CFO of Boost Payment Solutions, said in the eBook. “This is where technology comes into play — are your systems flexible enough to make quick changes if required? When we think about the realm of B2B payment solutions, conventional methods are often criticized for their rigidity and complexity.
“To successfully address uncertainty, it is not just about the tools but also the mindset,” Lamson added. “Being nimble, proactive and adaptable is crucial in a landscape where change is the only constant.”
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