While 79% of CFOs anticipate net profit growth over the next 12 months, the highest in 10 quarters, only 51% are confident their business can meet increased demand, a 12-point drop from the previous quarter.
That’s according to Grant Thornton’s Q3 2024 CFO survey, which engaged more than 230 senior finance leaders. Despite a substantial drop in confidence, chief financial officers (CFOs) still anticipate growth, and remain optimistic about IT investments, and sales and marketing efforts. The upcoming US election is viewed as a potential disruptor, but core business strategies remain unchanged.
Paul Melville, national managing principal of CFO advisory for Grant Thornton, said finance leaders are confident. “Finance leaders’ belief in their ability to drive profits at their organisations remains unshaken, even as their confidence in other key fundamentals tumbled in an unsettled environment. CFOs believe they can push the right buttons to help their organisations thrive in the long term.”
Confidence in meeting key objectives such as supply chain (53%), labour needs (49%), and cost control (42%) has declined. Cost optimisation has become a priority, with 64% focusing on it, marking a 10-quarter high.
Two thirds of CFOs expect to increase spending on IT and digital transformation, a 15-quarter high, particularly in areas like generative AI for customer experience and product development, while boards are becoming more involved in AI governance to balance risks and rewards.
More than half (56%) of CFOs plan to increase sales and marketing spending, the highest level in 15 quarters, as they seek to differentiate products and gain market share.
More than 60% believe the upcoming US election could lead to changes in business strategy, particularly through its effects on the economy, tax policy, and regulation. However, some CFOs (46%) say the election will not impact their investment plans. Despite these election concerns, CFOs remain focused on AI, cybersecurity, and growth fundamentals.
“You’re still going to invest in AI to drive improvements through technology,” Melville said. “You’re still going to make sure your cybersecurity protections are strong. The business fundamentals like efficiency in the finance function and the basics for growing your business aren’t going to change regardless of who is in the White House or the government.”
©Markets Media Europe 2024
