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Survey: CFOs Report Highest Level of Optimism About Economy Since 2021

By:
Ruth Singleton
Published Date:
Jul 18, 2024

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A recent survey by Grant Thornton, the Q2 2024 CFO survey, revealed that 58 percent of chief financial officers are optimistic about the U.S. economy, representing the highest level of optimism since the third quarter of 2021.

According to the Journal of Accountancy, more than 225 senior financial leaders participated in the survey. They represented a mix of U.S. companies, 69 percent of which have annual revenues between $100 million and $1 billion. Fifty-one percent of the companies are privately held, 33 percent are public, 13 percent listed themselves as “other,” and 3 percent are private equity portfolio companies

The survey also found that 63 percent of CFOs are confident in their organization’s ability to meet increased demand, and 75 percent of them expect net profit to grow over the next 12 months. In addition, 69 percent said they expect their revenue to increase and 67 percent said they expect their expenses to rise.

Roughly 57 percent of the respondents said that cost optimization remains their main concern this quarter.

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

In addition, the respondents’ confidence in meeting supply chain needs (62 percent) is up by six percentage points compared with the previous quarter, and their confidence in meeting growth projections (56 percent), cost control goals (55 percent) and labor needs (55 percent) is similarly high by historical standards.

The survey also asked the respondents about their companies’ use of technology, and  94 percent said they are using or exploring potential uses for artificial intelligence (AI), while 64 percent mentioned IT/digital transformation as a top area for expense increases.

The respondents reported that their companies’ use of generative AI increased significantly even between the first and second quarters of 2024. For example, 74 percent of respondents said they used AI for data analytics and business intelligence in 2024 Q2 , compared to 66 percent in 2024 Q1; 63 used it for cybersecurity and risk management in Q2, compared to 47 percent in Q1; 55 percent used it for customer relationship/experience in Q2, compared to 45 in Q1; 55 percent used it for financial operations and processes in Q2, compared to 54 per cent in Q1; and 43 percent used it for product/service development in Q2, compared to 35 percent in Q1.

Jim Wittmer, a principal in  tax services at Grant Thornton Advisors LLC, said, “People are trying to do more with less. There’s willingness to spend on technology, … but there’s definitely a cost rationalization element in the market right now.”

The respondents also spoke about hiring challenges at their companies, with 58 percent of finance leaders saying that attracting and retaining key talent is a human capital priority for the next 12 months, ranking these staffing activities as their top human capital priority.

Asked for the top reasons why employees stay, 35 percent of the respondents said job security, 26 percent said bonus or incentive, 24 percent said base pay, and 23 percent said work-life balance.

 

 

 

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