A US Bank survey of 1,000 senior finance leaders at large and mid-size US firms conducted between March and April found that driving revenue growth now ranks second on their list of priorities behind cutting costs, compared to just seventh in the previous survey conducted in mid-2024.
The emphasis on cost savings was particularly strong in sectors such as technology, life sciences and pharmaceuticals, and chemicals and advanced materials. Finance leaders in transportation and logistics and insurance were more likely to prioritise revenue growth.
Gary Vecchiarelli, CFO at data centre developer CleanSpark says his firm has sharpened its focus on growing revenues.
“In a capital-intensive industry, revenue growth only matters if it creates durable shareholder value,” he explains. “We have focused on expanding low cost capacity, improving operational efficiency and allocating capital to projects that generate attractive returns across market cycles rather than pursuing growth for its own sake.”
More than 70% of survey respondents said rising global uncertainty and volatility had caused them to delay or scale down at least one major investment project over the previous 12 months, while 12% reported cancelling at least one major project.
Yet just under half said they were more likely to make acquisitions over the next 12 months compared with the last 12 months with bolt-on deals appearing more attractive than transformational moves.
Many clients are viewing this as a favourable window to do a deal and don’t want to wait for conditions to be ‘perfect’ if the strategic rationale is there.
Vecchiarelli says he is not surprised by this momentum for M&A, noting that periods of volatility often create valuation dislocations and strategic opportunities. “Companies with access to capital and a disciplined acquisition framework can use M&A to accelerate growth and improve competitive positioning,” he adds.
Almost two-thirds (64%) of finance leaders at larger firms felt positive about their businesses’ financial prospects over the next 12 months, compared with 31% among smaller firms. Despite geopolitical and macroeconomic challenges, 45% of the companies surveyed across all business sizes had a positive 12 month outlook on their business’s financial prospects.
“I share this cautiously optimistic outlook,” says Vecchiarelli. “While geopolitical and macroeconomic risks remain elevated, companies that maintain strong balance sheets, operational discipline and financial flexibility are well positioned to navigate uncertainty and capitalise on opportunities.”
Concerns around inflation have moved up the list of risk factors with one-third of the CFOs surveyed by US Bank referring to rising costs as their number one risk factor.
Finance leaders need to focus on productivity, procurement discipline and long-term contracting where appropriate, suggests Vecchiarelli. “The most effective response to inflation is often improving operational efficiency rather than simply passing costs through to customers.”
This is significant given that 55% of the businesses that responded to the survey planned to raise the share of costs passed on to customers.
“Although macro risks remain elevated, CFOs are moving off the sidelines and leaning into core
investment and growth decisions,” suggests Felicia La Forgia, Head of the US Bank Institutional Client Group. “We are seeing broad-based loan growth across sectors, along with growing momentum in M&A and capital investment.”
