U.S. Bank CFO Survey

Corporate Finance Leaders Tighten Belts Amid Uncertainty

U.S. corporate finance leaders have increased focus on cutting costs to prepare their firms for potential economic and geopolitical uncertainty, according to the fourth annual U.S. Bank CFO Insights Report.

The survey of more than 2,000 senior finance leaders nationwide revealed the top two priorities are cutting costs within the finance function and across the entire business. In contrast, driving revenue growth is just the fifth most prevalent priority. Cutting costs within the finance function has nearly doubled as a priority since the U.S. Bank CFO Insights Report began in 2021. Improving risk identification and mitigation also continues to climb in importance, now the third most common top priority.

For specific top risks, finance leaders continue to identify areas like talent shortages and pace of technology changes, but geopolitical tension has jumped six spots from the 10^th most cited risk last year. Meanwhile, high inflation was cited less often this year as a top risk (25%) compared to last year (38%), although it remains an elevated risk for some industries, like Telecom and Media (42%).

“The CFO’s job has always been a challenge. But today they face higher inflation and interest rates, political uncertainty in the U.S. and abroad, a difficult-to-forecast short-term economy and incredible pressure to make the right technology investments their firms will need to compete,” said Stephen Philipson, head of Global Markets and Specialized Finance at U.S. Bank. “This year’s survey showcased how finance leaders are working through this set of circumstances by focusing on cost cuts and risk management without neglecting their investment priorities.”

Key survey findings:

Economic outlook vs. business prospects

• 33% of finance leaders hold a negative outlook for the economy for the rest of 2024. However, the long-term forecast is more positive, with only 15% maintaining a negative outlook for the U.S. economy over the next three years.
• Despite the challenging operating environment, 45% of finance leaders remain optimistic about their business’s financial outlook over the next 12 months. This number jumps to 61% when they look to the next three years. For instance, in the automotive industry, only 37% are positive about the next 12 months, but 63% are optimistic over the next three years.

Top risks