CFO Confidence Soars as Risk Appetite Returns 'Deloitte CFO Signals™ Survey 4Q 2024'
NEW YORK, Jan. 15, 2025 /PRNewswire/ --
Key takeaways
- CFO Confidence Score hits highest level in 10 quarters.
- Seventy-two percent of CFOs believe the North American economy will improve over the next year, with half rating the region's current economy as good.
- Sixty-seven percent of CFOs say now is a good time to take greater risks, a major reversal from the cautious mood seen in recent quarters. Doubts about U.S. equity market valuations persist, with 58% of CFOs viewing current valuations as overvalued.
- Forty-two percent of CFOs are prioritizing enterprise risk management in 2025, alongside cost optimization (40%) and digital transformation of finance (40%).
Why these matter
Each quarter, CFO Signals™ tracks the thinking and actions of leading CFOs representing North America's largest and most influential companies. Since 2010, the survey has provided key insights into the business environment, company priorities and expectations, finance priorities, and CFOs' priorities. Participating CFOs represent diversified, large companies, with respondents reporting annual revenues of $1 billion or more.
CFO Confidence Score on the rise
The CFO Confidence Score for the fourth quarter came in at 5.8, up from a 5.0 in the third quarter — and the highest reading in 10 quarters. The Score, based on responses to five questions in the Deloitte CFO Signals survey, measures CFO sentiment about future economic and business conditions. The typical range of the metric, based on tracking over the past 20 quarters, is between 4 and 7.
CFOs paint a rosier picture of global economic conditions
Finance chiefs are more optimistic about North America's economic outlook, with 72% expecting the economy to be better in a year, and 50% viewing conditions as "good now." Both responses reflect a more optimistic view about the prospects for the North American economy compared to results from the 3Q survey. Respondents also expressed enthusiasm for several key regional economies. More than a third (37%) of CFOs expect improvement in economic conditions in Europe in a year — a substantial jump from recent Signals surveys.
Despite their renewed enthusiasm, finance leaders will most likely face difficult challenges ahead. CFOs cite the economy (56%) and geopolitics (46%) as their most worrisome external concerns. Interest rates (44%) also remain a notable risk for CFOs. However, recent cuts to the Federal Reserve's overnight rate — as well as the prospect of more reductions in 2025 — may provide some relief for organizations carrying expensive debt.
Risk-taking on the rise
In a significant shift, 67% of CFOs say now is a good time to take greater risks — the highest reading since the beginning of 2018. Notably, more than half (55%) of respondents indicate greater interest in undertaking acquisitions or mergers in the coming year.
Growth in key metrics
CFOs also project substantial growth across five key metrics tracked by the report. Revenue is expected to rise by 10.8% in the next year. Similarly, CFOs foresee a 7.6% increase in earnings. Capital investments are expected to increase by 8.7%, with dividend growth of 6.4%. CFOs anticipate a 7.3% bump in domestic wages/salaries, and a 5.8% hike in domestic hiring.
Evaluation of capital markets
CFOs remain skeptical about stock valuations, with 58% considering U.S. equity markets overvalued and 30% viewing them as undervalued.
Strategic priorities for 2025
Heading into the new year, 42% of CFOs cite enterprise risk management as a top priority, emphasizing perhaps the need for robust frameworks to address financial and operational challenges. Additionally, cost optimization (40%) and digital transformation of finance (40%) rank high among their internal focus areas.
When it comes to utilizing cash reserves, CFOs indicated that their organization's top priorities include investments that drive long-term value. The top priorities include increasing cash reserves/holding more cash (46%), allocating or reallocating capital to new business investments (44%) and increasing dividends (44%). These responses reveal a cautious yet forward-looking approach to resource allocation, balancing stability with strategic growth.
When CFOs were asked to name their top priorities for finance talent in 2025, mentoring/training potential successors was the top answer (44%). This was followed closely by expanding upskilling or reskilling efforts (43%) and automating processes to free employees for higher-value work (43%).
Key quote
"As we enter 2025, CFOs are navigating a complex economic environment. While optimism is growing for the North American economy, ongoing challenges such as geopolitical tensions and market volatility require a strategic balance between seizing opportunities and mitigating risks. This year, finance leaders say they will likely focus on leveraging enterprise risk management and technology-driven insights to drive agility and position their organizations for long-term growth."
Download the findings from the "Q4 2024 CFO Signals" survey here.
Methodology
Every quarter, Deloitte's CFO Signals closely follows the thinking and priorities of leading CFOs who represent some of North America's largest and most impactful organizations. This report summarizes CFOs' opinions across four key areas: the evolving business environment, organizational strategies and priorities, financial planning and investment trends, and the personal priorities shaping leadership decisions in 2025.
The CFO Signals survey for the fourth quarter of 2024 was conducted between Nov. 13 and Nov. 25, 2024, A total of 200 CFOs in the U.S., Canada and Mexico participated in this quarter's survey. Respondents work at publicly traded or private organizations across five industry sectors and with at least $1 billion in annual revenues. For more information about Deloitte CFO Signals or to inquire about participating in the survey, please contact NACFOSurvey@deloitte.com.
About Deloitte
Deloitte provides industry-leading audit, consulting, tax, and advisory services to many of the world's most admired brands, including nearly 90% of the Fortune 500® and more than 8,500 U.S.-based private companies. At Deloitte, we strive to live our purpose of making an impact that matters by creating trust and confidence in a more equitable society. We leverage our unique blend of business acumen, command of technology, and strategic technology alliances to advise our clients across industries as they build their future. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Bringing more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte's approximately 460,000 people worldwide connect for impact at www.deloitte.com.
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