Finance leaders brace for tariff impacts while prioritising cost reduction over expansion amid global uncertainty.
Optimism among Ireland’s chief financial officers has collapsed from 60% to just 28% over the past year as geopolitical risks reach their highest level since Deloitte began tracking the data a decade ago, according to the consultancy’s latest European CFO survey.
The dramatic shift in sentiment reflects growing concerns about global trade disruption, with more than 8 in 10 Irish CFOs expecting tariffs to impact both sales (83%) and supply chains (85%) over the next six months.
“The changes to global trading structures now mean there is enhanced geopolitical shifts, and the vast majority of CFOs in Ireland now expect tariffs and global tensions to directly affect their operations”
Geopolitical risk is now cited as a key concern across 86% of countries surveyed in this year’s study – surpassing even the levels seen during Russia’s invasion of Ukraine in early 2022. The survey, conducted across 14 European countries with 1,542 participating CFOs, reveals a continent-wide trend toward defensive business strategies.
“Geopolitics is clearly weighing on CFO sentiment,” said Tom Hynes, Deloitte Ireland partner. “The changes to global trading structures now mean there is enhanced geopolitical shifts, and the vast majority of CFOs in Ireland now expect tariffs and global tensions to directly affect their operations.”
The pessimistic outlook is reflected in revenue expectations, with just 45% of Irish CFOs anticipating revenue growth over the next 12 months – down sharply from 74% this time last year. One in five (22%) now expect their revenue to decrease.
Defensive strategies take priority
Against this uncertain backdrop, Irish finance leaders are pivoting toward efficiency-driven strategies rather than expansion. Cost reduction tops the priority list for 57% of CFOs, followed by reviewing supply chain efficiencies (48%) and digitisation initiatives (42%).
Expansionary ambitions have been firmly shelved, with nearly half (49%) of Ireland’s financial leaders saying that expanding into new markets is not a priority, while three-quarters (75%) have ruled out growth through acquisition.
Despite the cautious approach, some positive indicators remain. More than one-third (36%) of Irish CFOs plan to increase capital expenditure over the next year – above the European average of 30% – while 28% intend to boost headcount, suggesting selective investment in growth and talent continues.
ESG investment bucking European trends
While many European firms are reducing environmental, social and governance spending, Ireland stands out as an exception.
Nearly half (40%) of Irish CFOs have increased ESG investment over the past year, with less than one in ten (6%) reducing investment in this area – significantly outperforming the European average of 27%.
Ireland’s finance leaders also see long-term opportunity despite current headwinds, with 65% believing there is scope to grow foreign direct investment in the country, even as 66% feel less optimistic about Ireland’s overall economic outlook.
Digital transformation concerns
However, Hynes expressed concern about Ireland’s relatively modest focus on digital transformation compared to European peers.
“While the number of CFOs focusing on digital transformation is positive, it is concerning that it is slightly lower compared to other European countries,” he said. “Digital transformation is an area where companies need to act now to remain competitive. For any business to not only survive but thrive, digital transformation needs to be a top priority and investment.”
The survey reveals a European business community grappling with unprecedented uncertainty, with 60% of CFOs now reporting they operate in a high-uncertainty environment – up from 53% in spring 2024 and 44% in spring 2023.
Beyond geopolitical risks, Irish CFOs cited concerns about economic outlook (83%), cybersecurity threats (74%) and shortages of skilled professionals (51%) as factors placing strain on strategic planning and operations.
“That said, Ireland still presents opportunity,” Hynes noted. “A significant number of CFOs believe there’s more scope to grow foreign direct investment, and we are seeing resilience in capital expenditure and ESG spending.”
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