U.S. Business Confidence Sees Sharp Drop Due to Trade Uncertainty
A Deloitte quarterly poll, conducted from June 4 to June 18, showed a marked decline in optimism among finance executives across North America, driven by intensifying concerns over the economic landscape and geopolitical risks.
Surveying 200 chief financial officers from companies generating at least $1 billion annually, the report revealed the overall CFO confidence index fell to 5.4 in Q2, down from 6.4 in Q1. Just 23% of CFOs now view the North American economy as "good now," a steep drop from 50% in the previous quarter.
Forecasts for revenue, earnings, and capital expenditures were also trimmed, reflecting a more cautious business outlook across all major operational fronts.
The study highlighted a growing risk aversion among CFOs, with only one-third seeing the present moment as favorable for increased risk-taking — the lowest level since Q3 2024 and down sharply from 60% in Q1.
Economic instability topped the list of external threats, closely followed by worries over cybersecurity and interest rate volatility.
Steve Gallucci, global and U.S. leader of Deloitte's CFO Program, explained the slide in optimism is chiefly fueled by broader global uncertainties, with tariffs playing a significant role.
Industry experts pinpoint the extensive tariffs enacted by the Trump administration in April as a critical source of business unease.
This environment has prompted many firms to adopt a cautious "wait-and-see" stance, postponing investment and hiring decisions despite financial markets appearing to brush aside the White House’s mixed signals.
Small businesses are equally strained. The National Federation of Independent Business (NFIB) reported its Small Business Optimism Index edged down by 0.2 points to 98.6 in June.
Although the NFIB’s Uncertainty Index dropped five points to 89, it remains elevated amid a politically charged news cycle, the report noted.
One key driver of the downturn was a sharp surge in firms reporting excess inventory, with nearly one in eight small businesses flagging "too high" stock levels in June — almost twice the May figure.
The NFIB summarized the mood: "Sentiment is in the tank, consumers are sharply divided on their political affiliation," adding, "Democrats are depressed, Republicans jubilant. Just how this will shape their spending is less clear. As uncertainty is resolved, the outlook will become clearer."
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