53% of CEOs Fear Tariffs' Financial Impact, Prompting Price
Increases, Workforce Reductions and Delayed Investments
CLEVELAND, Jan. 8, 2025
/PRNewswire/ -- The latest CBIZ-Hofstra
University CEO Survey highlights pressing concerns for
middle-market CEOs as they navigate the dual challenges of proposed
tariffs and uncertainty surrounding U.S. tax policies. The survey
sheds light on how these factors are shaping business strategies in
a shifting economic environment.
Tariffs emerged as a dominant issue, with
53.2% of CEOs expressing strong concern over their financial
impact.
Tariff Concerns Force Strategic Adjustments
Tariffs emerged as a dominant issue, with 53.2% of CEOs
expressing strong concern over their financial impact. In response,
many companies are preparing for significant operational
changes:
- 80.9% are considering relocating production to mitigate
tariff-related costs.
- 75.4% may reduce their workforce.
- 72.3% plan to delay investments.
- 66.4% are exploring new supplier options.
- 50.0% are contemplating price increases.
"Our findings highlight the profound ripple effect that even the
discussion of tariffs is having on the middle market, forcing CEOs
and management teams to rethink their strategies at every level,"
said Jerry Grisko, President
and Chief Executive Officer of CBIZ. "These economic factors compel
businesses to be more agile, re-evaluate their operational
frameworks, and seek innovative solutions to maintain resilience
and competitiveness. Understanding and anticipating these shifts
are crucial for CEOs. "
Mixed Impacts of U.S. Tax Policies
The survey also reveals divided perspectives on the benefits of
recent and proposed tax reforms:
- 42.6% of CEOs reported moderate benefits from the Tax
Cuts and Jobs Act (TCJA), including reduced corporate tax rates and
bonus depreciation.
- 51.9% anticipate positive effects if TCJA
provisions are extended, though 30.1% expect no impact.
- 43.3% have benefited from the Inflation Reduction Act
(IRA), but nearly half (47.7%) reported no tangible gains.
"While tax reforms have provided relief for many, the overall
impact remains uneven across industries," said Bill Smith, National Director of Tax Technical
Services at CBIZ. "The survey underscores the complexity of
tax-driven economic policies and the need for individually tailored
strategies to address them."
Key Takeaways on Business Confidence and Planning
Beyond policy concerns, the survey reveals broader trends
influencing CEO decision-making:
- Economic concerns: Consistently the top issue, cited by
55.1% of CEOs.
- Talent availability: Ranked among the top three
influences by 37.5%, reflecting persistent hiring challenges.
- Cybersecurity concerns: Growing in importance,
increasing 6.7% since September.
Despite these challenges, optimism among CEOs rebounded in
December, with 45.0% rating their outlook as highly positive, up
from 34.5% in September.
The survey was developed, conducted, and analyzed by Zarb School
MBA students, led by Dr. Andrew
Forman, associate professor of international business and
marketing, in partnership with CBIZ.
"The data from our latest survey underscores the heightened
sensitivity of middle-market CEOs to both tariffs and tax policy
uncertainties," shared Dr. Andrew
Forman. "As such, businesses are making difficult but
necessary decisions to safeguard their profitability and maintain
competitiveness."
"Learning to adapt and adjust during uncertain times is an
essential lesson for business students," stated Janet A. Lenaghan, Dean of the Zarb School of
Business. "Embracing change with a growth mindset empowers leaders
to transform challenges into opportunities, drive innovation, solve
problems effectively, and strategically position their businesses
for long-term success."
About the Survey
The CBIZ-Hofstra Survey is a periodic gauge of mid-market CEOs'
outlook and priorities for the next 12 months. The survey polled
the leaders of companies with revenues ranging from $5 million to $1
billion-plus and was conducted the week of December 9, 2023. Two hundred fifty-six
mid-market CEOs and leaders participated. Previously known as the
Marcum - Hofstra Survey, the name was changed following CBIZ's
acquisition of Marcum last year.
About the Frank G. Zarb School of Business at Hofstra University
Hofstra University's Frank G. Zarb
School of Business prepares students to become tomorrow's global
leaders. Located just 25 miles from New
York City, Zarb students have access to internships and
networking opportunities across every industry. The Zarb School
combines entrepreneurial, hands-on learning and research with
real-world experience and mentorship in state-of-the-art
facilities, including a Behavioral Research Business Lab, Institute
of Innovation and Entrepreneurship, Core Skills Lab, and academic
trading room. Our undergraduate and graduate programs in
accounting, management and entrepreneurship, marketing and
international business, finance, and business analytics are ranked
and recognized by US News & World Report, Princeton
Review, and Poets & Quants. Visit hofstra.edu/zarb
for more information.
About CBIZ
CBIZ, Inc. (NYSE: CBZ) is a leading professional services
advisor to middle market businesses and organizations nationwide.
With unmatched industry knowledge and expertise in accounting, tax,
advisory, benefits, insurance, and technology, CBIZ delivers
forward-thinking insights and actionable solutions to help clients
anticipate what's next and discover new ways to accelerate
growth. CBIZ has more than 10,000 team members across more than 160
locations in 21 major markets coast to coast. For more information,
visit www.cbiz.com.
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