Middle-market CFOs prioritize defensive spending during uncertainty

A report by PYMNTS Intelligence titled “The Cost of Caution: Why CFOs Put Growth Plans on Hold” indicates that middle-market chief financial officers in the United States are increasingly adopting defensive postures in response to economic uncertainty.

According to the findings, more than half of CFOs require a high level of certainty before committing to expansion. However, 91% of respondents noted that even a small or moderate decline in certainty could trigger a shift toward defensive spending. This rapid response often results in the disproportionate cutting of growth-oriented investments, such as hiring and marketing, while maintenance capital expenditures remain largely untouched.

The speed of these budgetary adjustments is significant, with 57% of CFOs adjusting capital expenditures within three months of a change in certainty, and 90% doing so within six months. This tendency to prioritize immediate operational stability over long-term expansion creates a competitive opening for more aggressive companies during periods of market volatility.