Chief financial officers of U.S. companies are more optimistic about the long-term outlook for the economy and even more optimistic about their companies’ prospects, a new survey finds. While last year’s concerns about an impending recession are waning, CFOs still have a lot to worry about, from high interest rates to geopolitical tensions, the poll found.
The results of the U.S. Bank survey of 2,030 financial executives are encouraging for investors. Although the report does not delve into earnings or revenue forecasts, its positive outlook raises hopes for continued stock market gains, a key concern for allocators.
Of course, challenges arise. Corporate finance executives say they are faced with “rising inflation and interest rates, political uncertainty in the U.S. and abroad, an unpredictable short-term economy, and an incredible challenge for companies to make the right technology investments they need to compete.” “We’re under pressure,” Stephen Phillipson said. U.S. Bank’s head of global markets and specialty finance said in a statement.
The survey shows that CFOs are slightly more optimistic than pessimistic about the country’s economy over the next 12 months, with 37% positive and 33% negative. However, over the next three years, the survey results are even more optimistic, with 58% positive and 15% negative. Survey participants asked respondents to respond with one of three responses: positive, negative, or neutral.
He has even more optimistic predictions for the fortunes of his company’s business. Over his next 12 months, the plus/minus breakdown is more pronounced, from 45% to 23%. Over three years, it goes from 61% to 14%.
Certainly, each industry has its own challenges. In the automotive sector, the survey found that only 37% of people have positive thoughts about the next 12 months, but 63% are optimistic about the next three years. U.S. auto sales rose an estimated 5.6% in the first quarter of this year, but some issues arose, including a slowdown in electric vehicle sales.
Talent shortages are seen as the biggest risk to business success for the third year in a row (according to 41% of respondents). This means that finding skilled employees is difficult. By sector, CFOs in manufacturing (47%), hospitality and leisure (46%), and technology (46%) cited talent shortages as the biggest risk. Across all sectors, the second biggest risk was the pace of technological change and digital disruption (38%). Cybersecurity and data breaches were his number three (28%).
CFOs cited geopolitical tension and war as the fourth-biggest risk (26%), up from 10.th The armed conflict has escalated over the past three years, and in February 2022, Russia invaded Ukraine. Hostilities between Israel and Hamas then began in October 2023, with Hamas attacking Israeli territory from Gaza.
Controlling costs is a top priority for finance leaders, with 44% saying reducing costs and making the finance function more efficient is a top priority, an increase of 6 points from 2023 and expected to increase in 2021. The proportion has almost doubled. But what they like is cost savings. Reduce costs by increasing efficiency rather than reducing headcount.
However, 39% say they are unsure about their ability to manage and mitigate emerging risks. Her CFO surveyed reported that artificial intelligence will help. 51% are prioritizing investments in AI in finance, with risk management being the main objective.
The report is U.S. Bank’s fourth annual CFO survey, with the first conducted in 2021 as the country began to emerge from the economic turmoil caused by the pandemic.
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Tags: AI, CFO, Chief Financial Officer, cost management, efficiency, Hamas, inflation, interest rates, Israel, recession, risk, human resources, US Bank, Ukraine, war