America’s CFOs are starting the year on a positive note, rating current business conditions a 6.7 out of 10—the highest current confidence level recorded by CFO Leadership’s CFO Confidence Index since Q3 of 2021.
Even better, CFOs anticipate improvement from here, projecting business conditions will end 2025 at 7.0/10—the most optimistic 12-month forecast since Q2 of 2021. Only 22 percent of the 147 U.S. CFOs polled this quarter expect deteriorating U.S. business conditions in 2025, down from 28 percent in Q4.
Among the reasons for CFO optimism is the expectation that the Trump administration and a Republican-controlled Congress will be friendlier to business, particularly domestic companies, mainly due to the promises of lower corporate taxes and deregulation.
“The new administration will do more to foster economic growth,” commented Donald Marsolini, former CFO at DECCO, who recently transitioned to the newly created role of chief strategic officer.
Some CFOs also indicate that their waxing optimism is due to the end of clients’ wait-and-see approach to spending, which defined 2024. With the election over, money previously on the sidelines may finally be put to work.
Still, even those forecasting an improvement in business conditions this year remain nervous about the economic effects of some of the policies proposed by the new president, particularly those affecting international trade and supply chains. (Our research team conducted the survey on January 13-16, just before President Trump’s inauguration.)
“Optimistic on the economy with the change in the Presidency/Congress,” said Sabrina Hancock, VP of finance at Clearwing, an AV equipment supplier in West Allis, Wisconsin, “but a little concerned about geopolitical and other issues that could arise and be detrimental to the economy/business.”
Sector Outlooks
The picture also looks quite different depending on the CFO’s business sector. Finance chiefs in the life sciences sector, including pharma and biotech, were the most optimistic, forecasting the U.S. business landscape will reach “very good” territory this year, to 8.2 out of 10, an increase from their rating of current business conditions if 7.8.
Meanwhile, their peers in healthcare services project conditions will deteriorate in 2025, though by a small margin, to 6.5 from 6.6 today. The most pessimistic CFOs were in the government and non-profit space; they see conditions falling to 5.9 from 6.2.
The most optimistic? Real estate CFOs. They rate current conditions 6 out of 10, but they expect a two-point improvement by this time next year—the largest change expected by any sector’s CFOs.
Capex, Cash and Debt
When asked how their companies would benefit from more favorable business conditions, 84 percent of the 147 CFOs surveyed said they anticipate revenue increases in 2025—up 6 percentage points from Q4.
However, the proportion of those who see revenue growth falling to the bottom line shows no movement over Q4 at 68 percent. One possible reason is the continuing struggle to keep a lid on operating costs.
The proportion of finance chiefs planning to increase capex declined to 41 percent in January from 48 percent in Q4; however, compared with last quarter, more CFOs plan to headcount this year (57 percent vs. 50 percent in Q4). January’s reading matches the jobs growth forecast by CFOs one year ago.
After a mid-2024 dip in the number of CFOs planning to add to their cash reserves, the proportion of CFOs expecting to boost liquidity rebounded. Over half (54 percent) of CFOs polled in the first quarter plan to stockpile cash in 2025, up from 50 percent in Q4.
Meanwhile, despite the pause in interest rate cuts by the Federal Reserve, the proportion of CFOs who intend to increase debt in 2025 rose to 29 percent this quarter, up 2 percentage points from Q4. Though a slight increase, it is the highest proportion since we began asking CFOs this question in September 2021.
About the CFO Confidence Index
The CFO Confidence Index is a quarterly poll of CFOs and finance chiefs on their outlook for business and how policies and current events affect their companies and strategies. Throughout the year, CFO Leadership surveys hundreds of CFOs across America at organizations of all types and sizes, to compile our CFO Confidence Index data. The Index tracks confidence in current and future business environments, as well as their forecast for their company’s revenue, profit, capex and cash/debt ratio for the year ahead. Learn more at StrategicCFO360.com/CFO-Confidence-Index