NEW YORK—Chief financial officers are becoming more cautious about the U.S. economy amid rising geopolitical tensions and inflation concerns, but many are still pursuing acquisitions, technology modernization and growth initiatives, according to the latest U.S. Bank CFO Insights Report.
The report, based on a survey of 1,000 senior finance leaders conducted between March 19 and April 14, found optimism has cooled compared with 2024 levels. Just 36% of finance leaders said they have a positive 12-month outlook for the U.S. economy, down from 42% in mid-2024, while 58% remain positive on the economy over a three-year horizon. At the same time, cost-cutting and operational efficiency remain the top priority for CFOs, cited by 39% of respondents, though driving revenue growth jumped to the No. 2 priority from seventh place in 2024.
U.S. Bank said geopolitical tension and war are now viewed as the top business risk, cited by 35% of finance leaders, narrowly ahead of high inflation at 34%. The report found 71% of respondents said rising global uncertainty caused them to delay or scale back at least one major investment project during the past year, while nearly half said it is becoming harder to pass rising costs on to customers. Even so, businesses plan to increase the share of costs passed through to customers from 50% to 55% over the next 12 months.
Despite the caution, merger-and-acquisition appetite continues to rise. Nearly half of respondents said they are more likely to pursue acquisitions over the next 12 months than they were during the prior year, with bolt-on acquisitions favored over transformational deals. The report also found supply chain restructuring continues, with 62% of companies with overseas manufacturing operations saying they have nearshored activity closer to the U.S. and 37% reporting reshoring initiatives back to the U.S.
The report also highlighted ongoing digital transformation efforts and increasing adoption of AI and modern payments technology. Finance leaders said they are measuring return on investment on an average of 41% of AI initiatives, with 47% of those investments generating positive returns. Meanwhile, 57% said they have modernized payments operations to reduce fraud and cyber risk, and nearly one-quarter said they have piloted or used stablecoins as a payment method during the past year, with adoption highest among the largest firms.