Survey: CFOs economic optimism takes big dive
A majority of financial leaders are pessimistic about the U.S. economy, and many are worried about meeting supply chain and labor needs.
Only 47% of finance leaders are optimistic about the U.S. economy, an "unprecedented" 21-percentage-point drop from the previous quarter, with pessimism at a 10-quarter high, according to the new first quarter survey of 226 chief financial officers from tax and advisory service firm Grant Thornton,
More than four-in-10 (41%) CFOs said they were confident in meeting their supply chain needs, a drop of 21 percentage points from the previous quarter and the lowest mark since the runaway inflation period of the second quarter of 2022.
Confidence in meeting labor needs (41%) and cost control goals (43%) fell 19 percentage points each from the previous quarter. The decrease was accompanied by a seven-quarter low in the percentage of CFOs predicting potential contraction of their workforce through layoffs (29%).
The survey results were released just days after the Trump administration levied dozens of new tariffs on key trading partners with the United States.
“Finance leaders have a lot of uncertainty about labor and tariffs and how those are going to affect growth, but they think they can manage through this once they gain more certainty,” said Paul Melville, national managing principal of CFO Advisory for Grant Thornton Advisors LLC. “Planning is becoming incredibly difficult, and resources are being used in performing a lot of what-if scenarios as opposed to focusing on growing the business.”
The number (38%) of respondents expecting higher retention rates hit a four-quarter low, with manufacturing, healthcare, public sector and not-for-profit CFOs among those with concerns about retention.
[READ MORE: Consumers seek low prices, express tariff concerns]
Nearly three-quarters (71%) of CFOs surveyed said customer experience is a major consideration in their digital transformation decisions. The portion of respondents who said they are deploying Generative AI to improve customer relationship management and the customer experience rose 19 percentage points over the past 15 months to 64%.
CFOs said higher customer satisfaction is the top factor used to calculate the benefits derived from Gen AI implementation. Half of respondents said the cost of implementing new technology is a barrier to digital transformation, and 46% identified integration with existing systems as an obstacle.
“If you haven’t done anything about digital transformation, you’re going to be in a mess,” Melville said. “This isn’t easy when you’re also doing your day job, but you have to cut through the noise and do what you need to do for the long-term health of your organization.”
