Finance leaders – already feeling uneasy about the economic outlook – grew even more pessimistic about the road ahead according to the latest CFO Survey from Chicago-based IPA 100 firm Grant Thornton.
In fact, 72% of the 249 CFOs surveyed for the second-quarter edition of the poll expect interest rate hikes will lead to a recession. Further, just 39% of respondents in the latest survey expressed a positive outlook regarding the U.S. economy over the next six months – a number that stood at 69% in September of 2021. Increasing costs of goods and services topped the list of reasons for such a negative outlook, with 73% of CFOs citing this as a key stressor, with increasing energy costs (71%), supply chain challenges (66%), rate hikes (64%) and the increased cost of credit and capital (61%) rounding out the top-five list of reasons for pessimism.
Despite the doom and gloom, however, 65% of the CFOs surveyed believe the economic impact of COVID-19 is waning – an increase of 15 percentage points from the previous survey – and, despite their recession worries, 66% of respondents expect their companies to still meet growth goals and 61% expect an increase in net profits over the next 12 months.
Among the other key findings in this edition of the survey:
- With a potential recession looming, 30% of the CFOs surveyed say they are considering layoffs
- While 71% of respondents are confident the demand for their business will continue, only 57% are confident about controlling costs
- Forty-one percent of CFOs say cybersecurity will be their top challenge over the next six months, followed by the supply chain (37%) and the remote workforce (32%)
“The strong prospect of a downturn is clearly guiding CFO behavior,” says Enzo Santilli, national MP for transformation at Grant Thornton. “In times like this, CFOs would be wise to tighten both their belts and their seatbelts – because the road ahead looks bumpy. The CFOs who remain highly collaborative and focused on what they can control are likely to emerge from this year with a much more positive outlook.”