A recent survey has revealed a significant rise in pessimism among chief financial officers (CFOs) in the United States, largely driven by concerns over President Donald Trump’s ongoing trade policies. The quarterly survey conducted by a professional services firm highlighted that 46% of CFOs hold a negative outlook on the U.S. economy for the upcoming six months. This marks the highest level of economic pessimism recorded since the firm began this line of questioning four years ago.
The escalation in pessimism among financial executives reflects the ongoing impact of President Trump’s trade war, with many CFOs reevaluating their operational strategies. The previous record for pessimism was 38%, observed in the second quarter of 2022 during a surge in inflation that cast doubts about economic stability. The current 46% signifies a substantial increase from the 29% recorded in the last survey.
This shift in sentiment comes despite the fact that President Trump has retracted some of his earlier tariff threats and faced judicial setbacks on others. Nevertheless, the unpredictable trade environment continues to unsettle finance leaders, complicating their long-term planning efforts.
The survey further indicates that this negative outlook is not confined to the broader economy but extends to specific operational concerns within companies. Only 41% of CFOs currently express confidence in meeting their growth targets for the year, a decline from 53% in the previous quarter and 65% in the quarter before that. Similarly, confidence in meeting cost control objectives has decreased to 37%, while the ability to meet supply chain requirements is also in doubt, with only 37% expressing confidence.
In response to the tariff situation, 46% of CFOs are planning to adjust their supply chains to minimize tariff exposure. Meanwhile, strategies such as price increases, scenario planning, and automation are being employed to mitigate financial impacts. Notably, 35% of CFOs indicated they are raising prices, 42% are engaging in scenario planning, and 39% are implementing new automation processes to control costs.
The survey also highlights a potential silver lining in labor needs, with 43% of CFOs now confident in meeting these needs, showing a slight improvement from the previous survey. However, challenges remain, as 31% are considering job cuts and 28% are planning to lower production in anticipation of decreased consumer spending.
The survey, conducted between April 30 and May 9, involved more than 260 finance leaders from companies with revenues exceeding $100 million. The data underscores the profound impact of trade uncertainties on financial planning and the broader economic outlook in the U.S.
Survey: Grantthornton.com
