CFOs are feeling better about business than they have in more than a year.
In CFO Leadership’s Q3 CFO Confidence Index, finance chiefs rate current business conditions a 6.0 out of 10, up 8 percent from 5.5 in the second quarter and back to where confidence stood at the end of 2025. That is the highest level recorded since the first quarter of 2025 (6.7) and back into “Good” territory, according to our 10-point scale.
Looking 12 months ahead, CFOs expect this to continue, forecasting conditions will remain at 6.0. While not an improvement from current conditions, it is nevertheless 4 percent better than what CFOs forecasted in Q2 (5.7), and 6 percent higher than what they expected 2026 would deliver back in January (5.6).
The concerns that weighed on sentiment earlier this year—ongoing uncertainty around tariffs, geopolitics and the overall U.S. economy—have not disappeared, CFOs say. But for many of the 147 finance chiefs polled July 14-19, the upside is that the feared deterioration in customer demand has not materialized.
Many of those surveyed echoed healthy pipelines and robust demand, with a majority still expecting profitability in 2026 to outpace 2025.
“Sales environment remains reasonable; some concerns and caution are visible, but sales are still happening,” said the CFO of mid-sized company in the facilities services sector.
“[We’re] starting to see an uptick in awarded work,” added another CFO at a small Michigan-based B2B company.
For one Florida-based consumer manufacturing CFO, conditions are near perfect (9 out of 10), a situation he attributes to the “strength of growth of sales volume and people with still plenty of disposable income.”
These findings echo those observed in our sister publication Chief Executive’s July CEO Confidence Index, which found CEOs’ assessment of current conditions at a 2026 high, with most reporting persistent demand.
Fewer Expect Further Improvement
The stronger confidence reading this quarter doesn’t mean CFOs are uniformly more bullish about the future: 35 percent expect business conditions to improve over the next 12 months, down from 47 percent in Q2.
But the share forecasting worsening conditions also declined, to 31 percent from 33 percent. The difference is found in the share expecting conditions to remain unchanged: up sharply to 33 percent from 20 percent last quarter.
CFOs see momentum in current demand, but uncertainty over inflation, policy, rates and customer behavior is keeping them from forecasting broader improvement.
For those more optimistic about the next 12 months, company-specific actions such as acquisitions, expanded sales efforts, new products and operational improvements combined with robust demand to drive forecasts for better conditions ahead.
For those expecting a downturn, the economy, inflation and rising costs led the list of reasons, followed by domestic policy, regulation and uncertainty.
Smaller Companies More Bullish, But Sector Gaps Emerge
Confidence is strongest among smaller and mid-size companies: 41 percent of CFOs at companies with less than $25 million in annual revenue expect business conditions to improve. The same share of CFOs at companies with revenue between $100 million and $499.9 million are optimistic.
In contrast, a much smaller share of large-company CFOs expects improvements: Just 18 percent of CFOs at companies with revenue of $500 million or more are optimistic that conditions will improve in the year ahead, while 53 percent expect conditions to remain unchanged.
Sector differences were also visible. Technology CFOs were the most optimistic, with 45 percent expecting conditions to improve.
Healthcare CFOs were more cautious, with just 25 percent forecasting improvement and 42 percent expecting conditions to worsen. Domestic policy and regulation, alongside customer demand, were their most frequently cited concerns.
Corporate Forecasts
Despite the divided year-ahead outlook, CFOs remain broadly positive about their own companies’ performance:
- Sixty-seven percent of CFOs expect revenue to increase in 2026 compared with 2025, up from 64 percent in Q2, though still below the 73 percent reported at the start of the year.
- Fifty-four percent expect higher profitability, up from 52 percent last quarter and just below the 56 percent reported in Q1.
Those expectations do not align neatly with CFOs’ broader outlook for market conditions. Neutral CFOs are the most likely to forecast revenue growth, at 77 percent. Two-thirds of pessimists also expect higher revenue, and 56 percent expect profits to increase.
Costs may explain much of that disconnect: 77 percent of all CFOs polled say they expect operating expenses to rise this year, up from 74 percent in Q2. But among pessimists, that share climbs to 87 percent. Among optimists, that drops to 69 percent.
Still, that has not stopped CFOs from investing: 43 percent say 2026 capital expenditures will surpass 2025, up from 40 percent in Q2 and 38 percent at the start of the year. Just 15 percent expect capex to decline.
For many finance chiefs, the opportunity is not simply to spend more, but to invest selectively while maintaining control over rising costs. “I anticipate organizations will continue investing in technology, automation and AI to improve productivity and address ongoing labor challenges,” said Jackie Herman, CFO at Crown Bank, a commercial bank headquartered in Edina, Minnesota. “I believe companies that have maintained strong liquidity, disciplined expense management and a long-term strategic focus will be well positioned to capitalize on growth opportunities as economic conditions continue to normalize.”
