In a macroeconomic environment where the only certainty is uncertainty, it stands to reason that it is hard to predict what CFOs or other business leaders think is on the horizon. This proved to be the case in the results of PNC’s  Inside the Minds of CFOs survey, which polled 300 U.S.-based CFOs on interest rates, the economy, and the challenges facing their companies. While survey participants were generally aligned on some issues, their feedback also included some significant surprises.

1. When asked how they expect their office space square footage to change in the next 12 months, 65% of CFOs said it would increase.

This surprising finding contradicts many headlines, which highlight the struggles of office real estate in the aftermath of the COVID-19 pandemic. However, according to PNC Head of Corporate and Institutional Banking Mike Thomas, the survey result may signal the start of a pendulum swing. “Over the last few years, companies have been able to grow jobs without growing office space, but we may be seeing that start to reverse as business leaders are realizing the effects of things that are lost by not having people in the workplace.”

2. Only 19% of surveyed CFOs of private companies said it was extremely or very likely they would pursue an IPO in the 12 months after a rate cut. Plus, 44% of CFOs of public companies said it was extremely or very likely their companies would go private after a rate cut.

What might account for the aversion to public markets? According to PNC Chief Economist Gus Faucher, it may have to do with avoiding regulatory and shareholder burdens. “The increased regulatory requirements for public companies, as well as having to contend with shareholder demands, may make going public less appealing than operating in a private structure where you are able to maintain more control.”

3. 75% of CFOs said that, following a rate cut, they would increase their spend on technology – but not necessarily on Artificial Intelligence (AI).

Over the last year, only 52% of surveyed companies had invested in AI/machine learning, while 71% had invested in cybersecurity/fraud protection and 65% in cloud computing. The AI finding may be surprising, given the growing prevalence of and interest in the technology, but for Thomas, it’s a logical result. “The reality is that AI is still in its early stages, and companies are still evaluating its uses, as well as its potential return on investment following a costly implementation. It makes sense that, in a higher-for-longer rate environment, CFOs are prioritizing their most urgent technology needs, which are largely centered around cybersecurity and realizing efficiencies through digital platforms.” 

It is perhaps an unsurprising result that 86% of CFOs said a rate cut would improve their company’s financial performance, and, according to Faucher, eventual rate cuts are a certainty they know they can anticipate. In the meantime, survey results reflect concerns that are more top-of-mind in the current environment. “Right now, CFOs are less concerned about Fed rate decisions than about other big uncertainties that may have an impact on their businesses, including the political environment, geopolitical tensions abroad, and concerns such as cybersecurity that are hitting them closer to home.”

Survey Methodology 

PNC Bank’s Inside the Minds of CFOs survey featured responses from more than 300 CFOs at U.S.-based companies. It was conducted by Bloomberg Media Studios immediately after the Fed meeting on June 12, 2024. The study included CFOs, ages 26+, employed full time as a CFO. Companies spanned 23 industries, with 61% of them having more than 1,000 employees and 31% with revenues of $1 billion or more. About 54% are publicly owned.

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