European CFO confidence has deteriorated sharply as geopolitical risk, energy costs, and margin pressure push companies towards tighter cost control and more cautious investment, according to Deloitte.

The firm’s spring 2026 European CFO Survey found that 48% of respondents were less optimistic about their company’s financial prospects than three months earlier, almost double the 25% recorded in autumn 2025. Only 19% felt more optimistic, while 33% reported little change. Pessimism has not been this high since the energy crisis of 2022. 

Confidence has travelled a long way since the post-pandemic rebound. In early 2021, 53% of CFOs were more optimistic and just 9% less optimistic. By the second half of 2022, those positions had almost reversed, with pessimism reaching 60% and optimism falling to 13%. The less optimistic share later dropped to 20% in early 2024 and 25% by autumn 2025 before climbing back to 48% this spring. 

The sharpest movement has come from CFOs who previously saw little change ahead. In autumn 2025, 53% of respondents said their outlook was broadly unchanged but, by spring 2026, that share had fallen to 33%. Optimism slipped only modestly, from 22% to 19%, while pessimism climbed by 23 percentage points.

Concern about the wider environment has risen just as sharply. Some 76% of CFOs now rate financial and economic uncertainty as high or very high, up 15 percentage points since autumn and back at levels last seen around the peaks of 2022. 

Deloitte links that return of uncertainty to a weaker macro backdrop, including renewed energy price volatility. Higher energy costs feed directly into operating budgets and can also keep inflation, interest rates and funding costs higher for longer. Each can alter the economics of planned investment, the cost of carrying working capital and the assumptions built into cash forecasts.

Responses from 1,136 CFOs across 12 European countries show how that unease is moving from sentiment into operating decisions. Cost reduction has become a top three priority everywhere in the survey, appetite for balance sheet risk is low, and growth plans are being pulled towards markets companies already know. 

Geopolitics moves into the forecast

Geopolitical risk now ranks as the leading concern across all 12 countries surveyed. Energy shocks, escalation of conflict in the Middle East and disruption to critical materials are the three geopolitical threats worrying CFOs most, linking the political outlook directly to input costs, sourcing and investment decisions. 

Recent experience gives those fears a hard financial edge. Some 42% of European companies said energy costs had negatively affected profitability and investment decisions during the two years to March 2026. 

Concern over the Middle East is similarly tangible. Almost half of CFOs (48%) expect developments in the region to have a negative effect on margins and investment decisions during the next year. Another 15% anticipate indirect consequences through weaker economic growth, supply chain disruption or tighter regulation. 

Preparedness looks much thinner than the level of concern. Only 21% believe their companies are adequately protected through hedging and diversification already in place. 

With only one in five CFOs satisfied with the protection already in place, companies may have to respond while a shock is unfolding. Hedging can soften currency, energy or commodity moves, while diversification can reduce dependence on a single market or supplier. Liquidity and forecasting then determine how much room finance has to respond before operational changes take effect.

Deloitte argues that these risks increasingly arrive together. An energy shock can raise costs, revive inflation and weaken demand while trade or geopolitical disruption alters sourcing assumptions at the same time. What begins outside the company can quickly reach the cash forecast, FX book and capital plan. 

Industry results show how unevenly the pressure is landing. Life sciences and healthcare is the most resilient sector, with 25% of CFOs optimistic about their financial prospects and 35% pessimistic. Among consumer companies, only 20% are optimistic and 48% pessimistic, reflecting softer discretionary demand and continued pressure on margins. 

Revenue expectations remain positive across much of Europe, but profitability is proving harder to defend.

Margins break away from revenue

More than half of CFOs expect revenue to grow over the next 12 months, yet 36% forecast lower margins. That is seven percentage points more than in autumn 2025 and almost exactly matches the 35% expecting margins to improve. 

Even a growing top line offers limited shelter. Among CFOs forecasting higher revenue, 42% still expect margins to remain flat or decline. 

The Deloitte survey report describes companies as “growing top-line sales but struggling to convert that growth into stronger bottom-line performance”. Higher energy and input costs are part of the squeeze, but a business can also lose margin through weaker pricing power, disrupted sourcing, currency movements or the expense of carrying more resilience through its operations. 

Investment plans show how quickly that pressure is changing behaviour. Only 26% intend to increase capital expenditure during the coming year, while 45% expect capex to remain unchanged. Some 85% are reluctant to take greater balance sheet risk. 

Every investment proposal now faces a higher bar. Spending intended to support growth has to compete with the value of preserving liquidity and flexibility when energy prices, policy assumptions or trade routes can change quickly.

Cost reduction now ranks among the top three priorities in every country covered by Deloitte, the first time that level of agreement has appeared in the survey’s history. 

Growth ambitions are narrowing alongside it. Organic growth expectations have fallen to 45%, their lowest level outside the pandemic and far below the 83% recorded in spring 2024. Expansion in existing markets has also reached 45%, but in this case the figure is the highest since spring 2022. 

Companies appear more willing to deepen positions where they already have customers, infrastructure and operating knowledge than to stretch into unfamiliar markets. Existing relationships and established routes to revenue carry extra value when the cost of being wrong has increased.

Planning for shocks

Among CFOs asked about risk mitigation measures, 51% say their companies used scenario analysis and impact assessments during the 12 months to March 2026, making it the most common response to uncertainty. 

Beyond scenario analysis, 28% integrated geopolitical and trade policy risks into corporate planning and 27% evaluated or stress tested internal resilience. Another 22% reduced dependencies on particular sales or procurement markets. 

Bigger structural moves are rarer. Only 17% reassessed or relocated production sites, 10% expanded or developed geopolitical expertise and 8% reviewed opportunities in new free trade zones. A further 18% were waiting for developments before acting, while 10% had taken no measures and did not plan to. 

So far, CFOs are changing assumptions more readily than assets. Scenario analysis, stress testing and changes to procurement exposure can be made without the cost and permanence of moving a factory or rebuilding a distribution network.

Currency movements, funding costs, commodity exposures and the timing of receipts and payments can turn geopolitical disruption into a margin problem before a factory moves or a supplier changes. That gives finance an early role in deciding which scenario the business can afford to absorb.

Laurent Descout, chief executive officer and co-founder of treasury platform Neo, said the findings reflected a highly pressurised environment. “While CFOs cannot control those external pressures, they can control how exposed their business is to them,” he said.

Descout also pointed to the role of treasury data when conditions move quickly. “Stronger data and clearer visibility across treasury, payments and FX can help them make faster decisions, manage exposure more effectively and ensure they can hold and pay in the right currencies when needed.”

Financial resilience increasingly depends on keeping options open. A company that can delay capex, switch funding, adjust hedges or move liquidity between currencies has more ways to protect margins when assumptions change.

Scenario planning becomes more valuable when those exposures can be located and measured quickly. A forecast built around several energy, currency or demand outcomes is only as useful as the company’s ability to see which balances, hedges and payment flows will move when one of those outcomes arrives.

Cost discipline reaches the workforce

Headcount plans show how far cost discipline has spread. Only 23% of companies expect employee numbers to increase over the next 12 months, while 36% anticipate reductions and 41% expect no change. 

Sector differences are pronounced. Life sciences and healthcare again looks comparatively resilient, with 37% of CFOs expecting headcount increases, the highest proportion of any industry. Half of consumer company CFOs expect headcount to remain frozen. Financial services is more aggressive on reductions, with 31% forecasting lower employee numbers. 

Pressure on margins is now showing up in hiring plans as well as procurement and discretionary spending. Companies that cut or freeze headcount while still expecting sales to grow will need existing teams and systems to carry more of the load, raising the importance of productivity alongside simple cost removal.

Where finance teams are also being asked to do more with existing headcount, the pressure is particularly awkward. More scenarios, tighter exposure monitoring and faster forecasting all create work, strengthening the case for investment that removes manual reconciliation or reporting.

Automation and digital investment may survive a broader squeeze where they can reduce manual work or strengthen resilience. Deloitte points to automation, digital transformation and supply chain diversification as ways to improve productivity and rebuild margins when conditions recover. 

Capex restraint makes those choices more selective. With only 26% planning to spend more and 85% reluctant to increase balance sheet risk, technology and transformation projects will need a clearer link to productivity, resilience or margin recovery.

The same caution appears in growth plans. Organic growth expectations and expansion in existing markets both stand at 45%, but the direction of travel is very different: the former is at its lowest outside the pandemic, while the latter is at its highest since spring 2022.

Keeping room to move

Europe’s CFOs have faced abrupt shocks before, but spring 2026 presents a difficult combination. The pandemic tested operating continuity. The 2022 energy crisis hit supply, costs and confidence. Today’s finance chiefs are dealing with renewed energy risk alongside geopolitical tension, uncertain growth and margins that are failing to keep pace with revenue.

Confidence can deteriorate even when companies still expect to sell more. The question is what those sales will cost to deliver once energy, financing, sourcing and currency risks have taken their share.

Caution is visible across almost every major decision in the survey. Nearly half of CFOs are less optimistic, 76% see high external uncertainty and 85% do not want greater balance sheet risk. Only 26% expect higher capex and 23% higher headcount. 

Growth still has a place in those plans. More than half still expect revenue to rise, 35% foresee stronger margins, and 45% are looking to expand in markets where their companies already operate.

The harder judgement is how far to cut. Lower costs and smaller commitments buy breathing room today, but productivity, technology and resilient supply chains still need investment if margins are to recover. With 85% reluctant to add balance sheet risk, CFOs will have to make those choices with less appetite for expensive mistakes.

Deloitte’s survey captures a finance community preparing for disruption while keeping one eye on recovery. Revenue may still grow, but in 2026 the quality of that growth matters more: what it costs, how much risk sits behind it and how much cash companies must commit to achieve it.