CFO optimism drops as tech investment remains resilient, survey finds
Economic optimism among U.S. chief financial officers has sharply declined, hitting its lowest point in over two years, according to the latest Grant Thornton CFO Survey.
While the broader economic outlook remains cloudy, with rising uncertainty around tariffs and labor market conditions, CFOs have continued to prioritize technology investments, signaling a distinct shift in their strategic focus.
Only 47% of CFOs expressed optimism about the U.S. economy for Q1 2025, marking a staggering 21-point drop from the previous quarter. This sudden shift reflects growing concerns about the economic impact of tariffs and labor shortages, with CFOs expressing doubt about the economy’s future trajectory.
“Finance leaders have a lot of uncertainty about labor and tariffs and how those are going to affect growth, but they think they can manage through this once they gain more certainty,” said Paul Melville, National Managing Principal of CFO Advisory at Grant Thornton Advisors LLC.
Despite the economic pessimism, the survey found that CFOs remain proactive in navigating uncertainty, particularly by investing in technology. The emphasis on tech modernization aligns with an ongoing trend where companies are increasingly prioritizing digital transformation over traditional cost optimization.
One of the most striking findings from the survey is that technology remains a key area of focus, with 226 CFOs citing technology modernization as a top priority. More respondents listed tech upgrades as a focus for the next six months than those prioritizing cost optimization, reflecting a broader shift toward long-term strategic investments despite economic concerns.
“Planning is becoming incredibly difficult,” Melville remarked. “Resources are being used in performing a lot of what-if scenarios as opposed to focusing on growing the business.” This comment underscores the increasing complexity of decision-making in an era of fluctuating market conditions, where digital transformation provides a sense of control amidst instability.
Digital investment is particularly strong in customer experience, with 71% of CFOs naming it as a major driver for technology adoption. Among the most notable advancements is the rise of generative AI tools for customer engagement, with 64% of CFOs reporting adoption—an increase of 19 points in just over a year.
Tony Dinola, Principal of Technology Modernization at Grant Thornton Advisors LLC, explained: “B2B businesses are working to drive similar experiences to what we get with Uber and DoorDash, but they’re not quite there yet. A continued focus on customer experience and investment in modern technology will be required to achieve these goals.”
As CFOs tighten their belts, confidence in supply chains, labor markets, and cost control has taken a hit. Only 41% of CFOs expressed confidence in meeting supply needs, a sharp 21-point drop from the previous quarter. Confidence in labor and cost control also dropped significantly, with only 41% and 43% of CFOs, respectively, optimistic about these areas.
The decline in supply chain and labor confidence aligns with broader concerns about market conditions and their potential to impact growth strategies. CFOs are struggling to reconcile their long-term vision with an uncertain present, a challenge exacerbated by external factors such as tariff policies.
Despite this pessimism, expectations for net profit growth have remained steady, with 78% of CFOs anticipating growth—though the forecasted scale of these gains is more modest compared to previous years. Conversely, only 29% anticipate layoffs, marking the lowest level in almost two years. However, retention remains a concern, with just 38% of CFOs expecting improvements in this area.
While digital transformation remains a top priority for CFOs, many companies are still struggling to implement the necessary systems to fully capitalize on their investments. One-third of CFOs reported that their data needs significant improvement or is poorly organized, hampering digital adoption and innovation.
Melville pointed out that while cost and integration continue to be barriers to digital adoption, the long-term benefits far outweigh the short-term challenges. “If you haven’t done anything about digital transformation, you’re going to be in a mess,” he cautioned.