Arun Singh, global chief Economist, Dun & Bradstreet, said, “The Q1 2025 Composite CFO Optimism Index shows a stable yet cautious outlook. While overall financial optimism slightly dropped by 0.8%, shifts across sectors and economic scenarios are evident. Concerns over US trade policies and global protectionism have dampened global macro-economic optimism. While the macro-economic outlook remains positive, CFOs are adopting a more cautious approach to growth and risk management”
MUMBAI: A recent survey of Chief Financial Officers (CFOs) in India, conducted by Dun & Bradstreet India, a leading global provider of business decisioning data and analytics, found that CFOs’ confidence for both industrial and services financial performance has reduced compared to Q4 2024.
Commenting on the findings of the survey, Arun Singh, global chief Economist, Dun & Bradstreet, said, “The Q1 2025 Composite CFO Optimism Index shows a stable yet cautious outlook. While overall financial optimism slightly dropped by 0.8%, shifts across sectors and economic scenarios are evident. Concerns over US trade policies and global protectionism have dampened global macro-economic optimism. The services sector shows reduced risk appetite, and operating margin optimism has decreased by 8% Q-o-Q, reflecting pressure on profitability. In short, while the macro-economic outlook remains positive, CFOs are adopting a more cautious approach to growth and risk management.”
The Dun & Bradstreet India Composite CFO Optimism Index analyses the optimism level of CFOs on 12 parameters: operating margin, liquidity position, level of financial risk on company’s balance sheet, risk appetite, need for raising short-term and long-term funds, cost of raising funds, availability of funds, domestic and global macro-economic scenario, overall scenario for mergers and acquisitions, and level of financial risks for businesses.
Overall optimism for financial performance reduced marginally by 0.8% in Q1 2025. Optimism on the financial sub-index for the industrial sector has declined by 7.1% Q-o-Q.
There is a decline in the macro-economic sub-index for the services sector in Q1 2025, due to uncertainty about the global recovery. Optimism in the industrial sector for the global macro-economic scenario declined by 9% Q-o-Q due to uncertainty on the global policy front – specifically on trade.
Overall, businesses are expected to benefit domestically from the anticipated rate-cuts and are therefore delaying their requirements for long-term funds for the moment, indicated by a decline in optimism for the need for long term funds. Optimism for company liquidity positions has reduced in Q1 2025, whilst optimism for the need for short-term funds increased in Q1 2025.
Key findings from the survey:
-The Composite CFO Optimism Index is at 134.3 for Q1 2025
-Overall optimism for financial performance has decreased by 0.8% in Q1 2025
-Optimism for overall macro-economic scenario stands at 168.7 in Q1 2025, increasing by 35.8% on quarterly basis
-Optimism within Industrial sector for financial performance sub-index declined by 7.1% in 2025
-Optimism on the Global macro-economic scenario for the corporate sector reduced by 6% Q-o-Q
-Optimism regarding the risk appetite in the current scenario in the services sector reduced by 38% Q-o-Q
-Optimism for company operating margins has reduced by 8% Q-o-Q