Supply chain confidence soars among US CFOs
Confidence in supply chains among US Chief Financial Officers (CFOs) rises 22% in final quarter of 2023, as businesses expect good business conditions overall
The share of US CFOs that believe that their supply chain is sufficient for their business needs rose 22% in the final quarter of 2023 to 67% in Grant Thornton’s Q4 2023 CFO survey.
This jump from the 45% who said that their business could meet supply chain needs in Q3 2023 is the highest point on record, although the question has only been asked by Grant Thornton since Q4 2021.
The lowest point of confidence was in Q2 2022, when just 38% of CFOs felt that their supply chain was sufficiently robust to meet business needs.
The result points to a wider confidence among CFOs of a brightening macroeconomic and supply chain environment, even in the face of reduced capacity in the Panama Canal, the Red Sea shipping crisis and looming possible disruptions to East Coast ports due to labour disputes.
“Despite a turbulent economy and the current shipping crisis in the Red Sea, CFOs seem confident in their supply chain and in their growth projections,” said Paul Melville, national managing principal of CFO Advisory at Grant Thornton. “It’s also clear that CFOs feel they can actually deliver on their growth projections.”
CFOs were also increasingly confident of having sufficient labour to meet their overall business needs and less concerned with inflation and cost controls.
While confidence in having enough workers to meet demand rose eight percentage points Quarter-on-Quarter (QoQ) to 57%, the share who see their business as being on top of cost control rose 10 percentage points to 56%, and the percentage ranking cost optimisation as priority fell to the lowest level in the survey since measurement began. The latter stood at 36% in Q4 2023, a QoQ decline of nine percent.
These results sit within a context of rising confidence in the economy and demand environment compared with last year. Seventy-one percent of CFOs predict that their revenues will increase and the share predicting they will meet their growth targets was up 10% year-on-year.
These results should mean strengthening demand within supply chains in North America, after a period of prolonged relative weakness. Overall, the results point to an increase in orders, especially as business inventories were gradually wound down across most of 2023, after heavy ordering in 2022.