What’s the 2022 economic confidence level?
Challenges are expected to continue
As 2022 quickly approaches, there are still many challenges and uncertainty organizations continue to face. In the past year, we’ve seen the rise of the “Great Resignation” lead to an employee shortage. Supply chain challenges have continued and now the pandemic assistance for organizations has expired.
With preparation for 2022 underway, CFO Strategic Partners has been hearing whispers of uncertainty. Recently, we released a survey to gauge organizations level of confidence in 2022 and how today’s current challenges will affect them in the new year.
With two years of the pandemic nearly behind us, organizations are beginning to feel the pinch and becoming less optimistic about the future. The drag of the supply chain challenges and lack of workers are leading organizations to the conclusion that there could be capped or depressed revenues in 2022.
This survey was answered by people from a wide range of industries including construction, professional services, healthcare, nonprofit, manufacturing and more. See below for a full breakdown of our results.
A majority of organizations are looking at the budget/forecast monthly
Due to the uncertainty the pandemic brought, many organizations had to adjust their typical budgeting/forecasting model. More than half of the survey respondents are opting to use a monthly model. Twenty percent are choosing to use an annual model, while a small percentage of respondents has no formal budget or forecast. One participant shared their organization has an annual plan that is broken down by each month.
The labor shortage continues to be a large issue for organizations
The labor shortage has been one of the most trying challenges for organizations to overcome in 2021. Unfortunately, over 80 percent of the survey respondents shared they see no signs this will let up as we move into 2022.
There are no signs the supply chain challenges will resolve by 2022
In addition to the labor shortage, a majority of organizations are also facing material shortages. Just like with the labor shortage, most of the survey participants see no signs the supply chain issues will be resolved before 2022. However, there’s much more uncertainty – nearly 20 percent of respondents aren’t sure if sourcing challenges with continue into the new year.
The end of pandemic assistance isn’t affecting most business leaders’ confidence
Over the course of the pandemic, there have been a couple rounds of government assistance provided to organizations through the Paycheck Protection Program. Now that the pandemic assistance has expired, it could leave some organizations short. While 65 percent of survey respondents shared this will not affect their confidence for 2022, 35 percent shared it is lowering their confidence for the new year.
A majority of organizations are cautiously optimistic business will be better in 2022
It’s no surprise the past two years have been full of difficult challenges for organizations across all industries. However, things are beginning to look up. A majority of the survey participants are cautiously optimistic business will improve for their organization in 2022. While most respondents have some confidence in this, 36 percent are uncertain.
Many organizations believe issues may put a cap on revenue
Organizations are currently facing production or operation issues because they don’t have enough people to accomplish the work and/or the materials needed. Lack of confidence in the economy is also preventing some organizations from expanding. Eighty percent of survey respondents shared that economic confidence or outside issues may put a cap on their revenue.
A majority of organizations have some confidence in the economy for 2022, but there are doubts
When it comes to the big picture, over half of the survey respondents shared they were somewhat confident in the economy for 2022. While a handful were very confident, 41 percent were lacking confidence.
Are you feeling less than confident about 2022? CFO Strategic Partners’ team of experienced, on-demand outsourced CFOs can provide the financial strategy and guidance you need to start the year off right. Email us at firstname.lastname@example.org or fill out the request for information form here.