A Grant Thornton Report
Last March, inflation was at 2.7%, workforce shortages weren’t yet a concern and many organizations hoped their supply chain woes were temporary pandemic anomalies.
This March? Inflation has roared to 8.5%, there are 1.9 workers for every job opening, supply chains are still tangled—and the Russian invasion of Ukraine has added to global instability. In just six months, CFO confidence in the U.S. economy has dropped from almost 70% to less than 50%. Almost half of CFOs expect inflation to hurt profits, and nearly 70% are at least somewhat concerned that Fed interest rate hikes will push the economy into a recession.
“Concerns about a possible recession coupled with the challenge of dealing with spiraling costs are definitely shaping strategy,” says Enzo Santilli, National Managing Partner of Transformation at Grant Thornton LLP. “I recently had the chance to speak with several board members from major companies, and they are tightening focus on core business functions and efficiency.”
When asked for their most significant challenges, cybersecurity (40%), supply chain (35%) and technology upgrades (34%) topped the list. “Russia’s reputation and track record as a cyberthreat and the increase in tensions due to the Ukraine invasion probably accounts for some of that increase,” says John Pearce, Principal in Grant Thornton’s Cyber Risk Advisory practice. “But increased investment doesn’t likely reflect new activities, it’s mostly devoted to existing issues like improving multi-factor authentication and edge-point monitoring and response. Regulations keep expanding, so compliance is a growing cyber expense.”