CFOs have highest level of optimism about economy since 2021

Chief financial officers (CFOs) at U.S. companies have the highest level of confidence in the economy since the third quarter of 2021, according to a new survey from business consultant Grant Thornton.

Grant Thornton’s Q2 2024 CFO survey found that 58 percent of CFOs are confident about the economy, while 63 percent are confident in their organization’s ability to meet increased demand. The latter represents a record high in the history of the CFO survey.

Among other findings, 62 percent are confident about meeting supply chain needs, while 56 percent are confident in their growth projections. Further, 55 percent feel good about their cost control goals while the same amount is confident about their labor needs.

In addition, 75 percent of CFOs expect their net profit to grow over the next 12 months, while 69 percent expect their revenue to increase. Also, 67 percent expect their expenses to increase while 57 percent of respondents said cost optimization remains their top area of focus this quarter.

“Although most finance leaders are confident in their ability to control costs, it’s going to require significant focus,” Paul Melville, national managing principal of CFO Advisory for Grant Thornton Advisors, said. “The business environment is ripe for growth, but CFOs must manage costs to capitalize on it.”

Another interesting data point is the fact that 94 percent of respondents said they are either using generative artificial intelligence (AI) or are exploring potential uses. This is an all-time high.

CFOs rate technology upgrades (39 percent) as their biggest challenge, followed by cybersecurity (37 percent). It should come as no surprise then that they are the top two areas for expense increases for the next 12 months. Specifically, 64 percent cited expense increases related to IT/digital transformation while 62 percent expected to spend more on cyber risk/security. In the history of the survey, these two percentages have never been higher.

“Cybersecurity is an area that every company has to continually address,” Mike Notarangelo, partner and Private Equity Audit & Assurance leader at Grant Thornton and a principal at Grant Thornton Advisors, said. “There’s a sharpened focus on it in the public markets given the recent SEC cybersecurity rules and some notable breaches in the past few years.”

In addition, inflation and the need for digitalization were cited as the most significant burdens that CFOs are facing as they attempt to keep costs under control.

The survey polled 225 senior financial leaders and CFOs at U.S. corporations.

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