Economic pessimism grows, but CFOs have strategic responses

Finance leaders are more pessimistic about the U.S. economy, according to a new survey, and they are making adjustments.

Grant Thornton’s second-quarter CFO survey found that 46% of CFOs expressed pessimism about the economy, which is forcing them to become more agile. For example, 46% are adjusting supply chains to reduce the impact of tariffs, 42% are conducting high-frequency proactive scenario planning, 39% are implementing technology to reduce costs, and 35% are raising prices.

The survey polled more than 260 senior finance leaders from a mix of U.S. companies.

Among the adjustments CFOs are making, 53% are increasing sales and marketing expenses, an increase of 13 percentage points over the previous quarter. In addition, 51% are focused on customer acquisition and retention, up 38 percentage points from the first quarter.

“As we navigate an era of unreliability, fast actions may differentiate winners from losers,” Paul Melville, Grant Thornton’s national managing principal of CFO Advisory, said in a news release. “Whether it’s a 90-day tariff reprieve or court rulings and appeals, the unpredictability of the economic environment doesn’t help finance leaders with long-term planning.”

Tax requirements and debt

Finance leaders are split in their assessment of new tax legislation and the effects on their companies. While 42% expect the tax changes to be positive, 33% said the changes would harm their financial position.

Business leaders and legislators also are concerned about the effects of the growing U.S. debt on the economy.

“Our interest expense has grown to be one of the highest government expenditures,” David Sites, Grant Thornton’s national managing principal and head of the Washington National Tax Office and International Tax Solutions, said in the release. “Anybody who has run a household budget knows that if the interest on your debt is one of your largest expenditures, your financial picture is not very healthy.”

AI and the future

AI is the future of finance — and the present. More than three-fourths (77%) of finance leaders who calculate their return on generative AI expenditures are getting at least two times the return on those investments. That’s up from 68% the previous quarter.

“As businesses adjust their supply chains, engage in rigorous scenario planning, and implement transformative technology, CFOs are finding ways to deliver revenue and profits,” Melville said. “They won’t be deterred by difficult economic conditions, and they’re determined to lead the way to growth.”

— To comment on this article or to suggest an idea for another article, contact Kevin Brewer at Kevin.Brewer@aicpa-cima.com.