CFO Business Sentiment Index - 1st Quarter 2025

CFO Business Sentiment Index To identify and provide timely guidance on important trends in business and in the economy, CFO Intelligence gathers insights from CFOs at middle market and enterprise level companies across various industries.

Despite Economic and Political Turbulence, Executives Breathe Easier in the First Quarter Screaming news headlines suggest a turbulent economy, but executives are dismissing many of the gloom-and-doom concerns, according to the latest CFO Business Sentiment Index . One sign of strength is that worries over finding and retaining talented employees — which were prevalent last year — relaxed in the first quarter. In the most recent survey, 27% of respondents say it’s “getting easier” to attract and retain qualified individuals. One of the drivers, however, is likely to be downsized federal workers seeking new positions. And while many CFOs last year were concerned about rising interest rates, no respondents reported worries in March, down from nearly 13% in January. Many were also unfazed about tariffs being levied against trading partners, with 42% saying their firms will be “moderately” impacted, compared to 35% who predict “significant” effects. Another 23% dismissed the tariffs, predicting an “insignificant” impact on their companies. Similarly, nearly three-quarters of executives say that tightened border and immigration policies will have little to no effect on their firms. More businesses are also considering M&As. In March, 54% of CFOs and other executives plan to consider business combinations within the next 12 months, more than double the number reporting that in January. Some other issues prompted more nuanced reactions. For example, even as more companies implement a return-to-office policy — 65% plan on it in March, up from 50% in January — executives have no plans to rapidly expand their facilities portfolios. In March, 89% reported “no changes planned,” up from 75% in January. And only 8% plan increases, down from 25% at the beginning of the year. Stubbornly high interest rates may be influencing their expansion decisions. Supply chains continue to concern CFOs, with 54% saying it’s an issue, up from 36% in January. And nearly 70% of executives do not see their companies increasing inventory levels — this may reflect uncertainty about the direction of the economy, or it could indicate challenges with getting goods. Reflecting their diverse responsibilities, CFOs say they’re splitting their time on such areas as distribution, M&A, and technology (4% each); and human resources and workforce environment, cybersecurity, and sales (about 8% each). The balance of their time is taken up by such issues as “staying competitive,” “margin deterioration,” and other responsibilities. Finally, CFOs appear to be slow to embrace the possibilities of artificial intelligence, with nearly one-third predicting an “insignificant” impact of AI on the operations of their companies. Half see a “moderate” impact, and only 23% say AI will “significantly” reshape their business. In line with those results, more than three-quarters of executives plan only “moderate” investments in technology. This could mean that many remain unaware of the efficiencies and other gains that AI and other tech can deliver. Or perhaps CFOs are just too busy to consider these new tools…for now.