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CFO Confidence Rebounds Amid Growing Risk Appetite: Insights from Deloitte’s 4Q 2024 CFO Signals™ Survey

The latest Deloitte CFO Signals™ survey reveals a renewed sense of optimism among chief financial officers (CFOs) across North America, signaling a potential turning point for economic and business strategies in 2025. The following are the detailed findings and why they matter:

 

CFO Confidence at a Decade-High

 

The CFO Confidence Score for 4Q 2024 reached 5.8, up from 5.0 in the previous quarter and marking the highest level in 10 quarters. This metric, based on responses about future economic and business conditions, reflects growing optimism among finance leaders. Historically, the score has ranged between 4 and 7, making this rise particularly notable. The consistent climb in confidence suggests CFOs are increasingly comfortable with the current business environment and optimistic about its trajectory.

 

Optimism for the North American Economy

 

  • 72 percent of CFOs believe the North American economy will improve over the next year, reflecting a significant upswing in confidence.

  • Half of respondents rate the current economy as "good," indicating stable conditions that support growth-oriented decision-making.

 

This optimism extends to global economic conditions, with 37 percent of CFOs expecting improvements in Europe, a substantial increase compared to prior surveys. This positive outlook comes as regions demonstrate resilience against economic headwinds, supported by stabilization in supply chains, moderate inflation levels, and improving consumer confidence.

 

Risk-Taking Gains Momentum

 

In a dramatic shift, 67 percent of CFOs now see this as a good time to take greater risks—the highest level since early 2018. This shift highlights a renewed appetite for strategic investments and growth initiatives. Additionally, 55 percent of CFOs express interest in pursuing mergers or acquisitions in the coming year, underscoring their focus on leveraging opportunities for market expansion and competitive advantage.

 

Strategic Focus Areas for 2025

 

As CFOs prepare for the upcoming year, they are aligning their priorities to address both immediate challenges and long-term opportunities. The top areas of focus include:

 

  • Enterprise Risk Management (42 percent): A critical focus as organizations strive to bolster frameworks that address financial, operational, and strategic uncertainties.

  • Cost Optimization (40 percent): Reflecting an ongoing need to balance growth with efficiency, particularly in an environment where margins remain under pressure.

  • Digital Transformation of Finance (40 percent): CFOs are leveraging technology to enhance operational agility, streamline processes, and provide data-driven insights that inform strategic decision-making.

 

Growth Projections

 

CFOs anticipate robust growth across several key metrics, reflecting their confidence in the economic outlook and the resilience of their organizations:

 

  • Revenue: +10.8 percent

  • Earnings: +7.6 percent

  • Capital Investments: +8.7 percent

  • Domestic Wages/Salaries: +7.3 percent

  • Domestic Hiring: +5.8 percent

 

These projections signal optimism about both top-line growth and investments in talent, infrastructure, and innovation, which are essential for sustaining momentum in a competitive landscape.

 

Caution in Capital Markets

 

While optimism is rising, skepticism about equity valuations persists.

  • 58 percent of CFOs believe U.S. equity markets are overvalued, highlighting concerns about potential market corrections or volatility.

  • 30 percent view markets as undervalued, suggesting opportunities for strategic investments at perceived discounts.

 

Finance Talent and Cash Utilization

 

Finance leaders recognize the importance of talent development and strategic cash management to drive organizational success:

 

  • Top Talent Priorities:

    • Mentoring successors (44 percent)

    • Upskilling/reskilling efforts (43 percent)

    • Automating processes to free employees for higher-value work (43 percent)

 

  • Cash Utilization Priorities:

    • Increasing cash reserves (46 percent)

    • Investing in new business opportunities (44 percent)

    • Boosting dividends (44 percent)

 

These responses reflect a forward-looking approach to resource allocation, balancing stability with investments in growth and innovation.

 

Key Challenges Ahead

 

Despite their optimism, CFOs remain vigilant about potential challenges. Their top external concerns include:

 

  • Economic conditions (56 percent)

  • Geopolitical tensions (46 percent)

  • Interest rate volatility (44 percent)

 

Recent reductions in the Federal Reserve’s overnight rate offer some relief, particularly for organizations managing high levels of debt. However, the broader economic landscape will continue to require strategic navigation.

 

Why These Findings Matter

 

Since 2010, Deloitte’s CFO Signals™ survey has tracked the sentiments and priorities of finance leaders from North America’s largest and most influential companies, each with annual revenues exceeding $1 billion. These insights provide a vital window into the evolving business landscape, shaping strategic decisions for the year ahead. With CFOs expressing growing confidence and readiness to take calculated risks, 2025 may mark a pivotal year for innovation, expansion, and resilience in the face of emerging challenges.

 

If you are a business owner or CEO within the San Francisco Bay Area and Silicon Valley, in need of an experienced fractional or outsourced CFO to help your company control costs, increase profit margins, improve cash flow as well as identify strategic growth opportunities, our highly skilled outsourced CFO services provide direct access to high-quality expertise in a cost-effective manner.

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