- Share of CFOs expecting a positive business outlook has more than halved compared to last year
- U.S. economic policy continues to be viewed as a risk to corporate development
- Six in ten companies are postponing investments or approving them only on a highly selective basis
Sentiment among corporate finance leaders is darkening. Four out of ten CFOs expect economic conditions to deteriorate further, according to a new study by management consultancy Horváth. Only 14 percent forecast positive business development – down from one-third last year. The share of those anticipating stagnation (+12%) or even negative performance (+7%) has increased accordingly.
“Macroeconomic factors such as U.S. economic and trade policy, as well as geopolitical tensions, are amplifying financial risks. To mitigate these challenges, companies must invest in digitalization/AI and transformation – but room for maneuver is limited. Investment freezes are taking a toll, skilled labor shortages are intensifying, and investor expectations are putting pressure on finance departments,” says Achim Wenning, study director and Partner at Horváth. More than 240 international senior finance executives across various industries were surveyed.
When explaining their pessimism, respondents most frequently cited rising global competitive pressure (59 percent). Bureaucracy (49 percent), energy prices (41 percent), inflation (36 percent), and tariffs (35 percent) followed. Sustainability topics such as climate and environmental regulations, which ranked among the top 10 negative influences last year, no longer appear on that list.
The study also took a closer look at the impact of U.S. policy. More than half of CFOs still view the Trump administration’s economic agenda as a risk (55 percent). Only one in ten see opportunities arising from the changed environment. For roughly three-quarters of finance leaders, the most severe negative effects stem from unpredictable and volatile tariff policies, shifts in international trade agreements, and threats to supply chains. By contrast, the U.S. withdrawal from climate policy, diversity and inclusion initiatives (DEI), and development aid programs plays only a minor role.
Investments Flow – If at All – Into Digitalization and AI Solutions
In response to the bleak outlook, a majority of surveyed companies are either postponing investments or moving forward only with strategic spending (59 percent). At the top of the investment priority list are digitalization and automation (29 percent), followed by transformation initiatives (19 percent). Strengthening supply chains, international expansion, and acquisitions each account for nine percent of investment focus.
Investors and executive leadership exert the greatest pressure on finance departments when it comes to risk management (30 percent each), followed by customers (18 percent), supervisory boards (15 percent), government bodies (14 percent), and finally employees (8 percent).
Talent Development High on the Agenda
Compared to last year, the finance agenda has not become any lighter. The top strategic priority for 87 percent of respondents is the harmonization, standardization, and optimization of financial processes. In second place, at 84 percent, is the development of employees and new capabilities. Accelerating digitalization (73 percent) and improving planning, reporting, and forecasting competencies are also central goals. The biggest obstacles, according to nearly one in five CFOs, are resistance to change within the organization and entrenched “silo thinking.”
About the Study
For the report “Control Meets Complexity – CFO Priorities in an Era of Economic Turbulence”, Horváth surveyed more than 240 finance leaders from companies in 22 countries. A majority of participating firms (83 percent) generate annual revenues between €100 million and €1 billion.
