CFO Forecasts For U.S. Business Climate Edge Down in Q2 

cfo confidence chart
Chief Executive Research
Second-quarter data from hundreds of U.S. CFOs shows America’s finance chiefs lowering their forecasts for business growth in May as uncertainty mounts.

What is the Fed’s plan for benchmark U.S. interest rates going forward? It got muddier when early second-quarter data showed inflation falling slower than the Fed expected. Rate-cut expectations and a solid GDP report for the end of 2023 had stoked the markets earlier this year, but optimism has dimmed somewhat due to the strong possibility the Fed won’t make a move until the Fall. 

Is it any surprise, then, that after feeling buoyant at the start of 2024, CFOs are now tapering their expectations for the business climate for the rest of this year and part of 2025? Their forecast for business conditions dropped from a 6.8 out of 10 (on a scale where 1 is Poor and 10 is Excellent) in the Q1 survey to a 6.4/10 this quarter.

Uncertainty—with the Fed, yes, but also with the upcoming presidential election and ongoing geopolitical instability—was the factor most often cited by CFOs when asked to explain their slightly more negative 12-month outlook for business conditions. We polled 134 finance chiefs May 13-16 as part of our CFO Confidence Index series in partnership with BlackLine. 

One of the CFOs polled says it will be difficult for Fed officials to bring interest rates down without stalling growth. “It seems likely that we will have sticky inflation with interest rates maintaining current levels or, alternatively, at least a mild recession,” he said, echoing the growing number of other CFOs who fear conditions will deteriorate in the coming months. 

The Q2 data shows a sharp increase in the share of CFOs who expect conditions 12 months from now to be worse than they are today: 31 percent vs. 19 percent who indicated so in February. That is the second-largest single-quarter fluctuation since we began polling CFOs in October 2020. 

The percentage of CFOs expecting worsening conditions is also notably higher than the 22 percent of CEOs and 15 percent of CHROs who shared a similar forecast for deteriorating conditions in the coming year—according to polls conducted by sister publications Chief Executive and StrategicCHRO360 earlier this month. 

As one CFO explained when asked about his revised outlook: “Economy and market volatility along with it being an election year. Inflation is still high, and it’s hard to tell what will come of [who is in] for the next four years.” 

Digging into the numbers… 

Data from the Q2 survey shows fewer CFOs expecting growth in the year ahead: 74 percent forecast increases in revenue (vs. 80 percent in Q1) and 64 percent forecast increases in profitability (vs. 74 percent in Q1). Instead, 22 percent expect profits to decline (vs. 14 percent in Q1), and 18 percent expect revenue growth to slide (vs. 14 percent in Q1). 

A similar trend is happening in capital expenditure forecasts: 36 percent of CFOs polled in May say they plan to increase capex in the year ahead, a drop from 45 percent in February. Instead, 19 percent said they’re trimming back investments for now. “Projects are beginning to push out due to cost of capital,” said one CFO. 

In the Q1 CFO Confidence Index survey, taken in February, the share of CFOs who planned on adding to their company’s headcount in the months ahead rose to 58 percent, the highest measurement since May 2022. But this quarter, that number dropped 10 percentage points, with less than half (48 percent) of the surveyed CFOs indicating their company intends to increase hiring over the next 12 months. 

The Q2 survey also revealed a more cautious approach to balance sheet management. A smaller proportion of CFOs plan to take on more leverage during the next 12 months, 18%, vs. 26% in the first quarter. Fewer CFOs forecast increases in their cash positions in that time (53%, down three percentage points from last quarter), but they still represent more than half of the finance chiefs polled. 

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, StrategicCFO360 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

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