While perfect visibility is elusive, Saidel-Baker expresses confidence that inflation will be a defining macro force in 2026. “Our forecast is for the consumer price index to be about 4.1 percent by yearend 2026,” she says. “That is nowhere near the 9 percent peak we had back in 2022, but obviously it’s much higher than 2 percent and not where the Fed wants it. All of that is going to limit how many more interest rate cuts we’ll be able to get from the Fed. I certainly don’t expect rate cuts too deep into the year, and I wouldn’t be terribly surprised if we start talking about rate increases again by yearend.”
Bifurcation Nation
Another reality looming large for CFOs navigating the shifting landscape is the growing recognition that prospects for 2026 vary dramatically by industry. Randeep Rathindran, a distinguished vice president at Gartner who focuses on CFO research, describes the U.S. business landscape as “bifurcation nation,” a K-shaped environment where some companies see strong tailwinds, while others face more headwinds and tread water.
“We have a significant swath of the economy that is not growing at the same rate you’re seeing, for example, in tech and AI,” says Rathindran, who notes that sectors like manufacturing, mass-market retail, professional services face more growth challenges. “A lot depends on in which industry you sit.”
“There will be a disparate impact, at least in the short term, with AI,” agrees Dr. Robert Murphy, chief economist at the fintech company Infineo. “If you’re a home builder, ChatGPT isn’t going to start throwing a hammer, but for any company whose employees work on a computer with an internet connection it will make operations much cheaper and more profitable. It’s going to be, ‘With a $2,000-a-month subscription we can get 30 employees that work non-stop, never call in sick and know calculus. We’ll be able to double our revenue and only have costs go up by 10 percent.’ There will be sectors, companies and individuals who profit very much from this trend and others who, well, won’t.”
Manufacturing companies, for example, are navigating a distinctly more challenging path, notes Laurie Harbour, a partner in Wipfli Advisory’s manufacturing consultancy division, who anticipates flat to minor growth for the sector in 2026. “For a lot of companies, demand for durable goods is down as a function of the economy,” she says. “We’re starting to see a lot of strife.”
That uneven landscape extends to the impact of external forces such as a tariff change or a downturn in consumer confidence, which can land as a manageable headwind for one company but a margin-threatening disruption for another. “It’s difficult to plan when you don’t know what the tariff rate will be next month,” says Murphy. “Business heavily dependent on importing raw materials or exporting to foreign clients face harder stress than their peers who are not in an industry like that. It’s just really difficult right now to make a plan with any degree of certainty.”
CFO interviews underscore that divide. Many report pursuing opportunity in shifting labor dynamics as hiring becomes easier and AI integration allows companies to do as much or more with a lower headcount. At the same time, there is widespread acknowledgement of inequities in the opportunities—and threats—at hand.
“The companies able to balance the delta of growing and managing margins and maintaining or improving profitability [by leveraging AI] will be the winners,” says David Pickel, CFO of the direct mail automation firm Lob, who is closely monitoring the impact on the sectors his company serves. “For our customers in a lot of sectors, tariffs put pressure on margins and profitability. Some sectors will probably be more negatively impacted, such as the auto industry, ecommerce and consumables.”
What emerges is a 2026 outlook defined by forward motion with flexibility. CFOs are preparing to lean into growth where their markets allow it, while recognizing that the durability of that growth will depend on how shifts in demand, labor supply, financing conditions and policy developments intersect with their industry realities. As a result, five areas of focus are emerging as critical focuses in forging financial strategies for the year ahead:
Assess AI opportunities—and threats
By now, there’s broad recognition that a focus on AI is table-stakes. It’s not whether to invest in capabilities but where and how that finance chiefs are tasked with exploring. “Every single one of us in the CFO role is looking at how we benefit from AI internally,” says Michael Perica, CFO of the software company Rimini Street. “From a labor perspective, from a value creation perspective, there are just so many implications, including, almost by definition, any manual process across the entire administrative line. That’s the efficiency side, but we’re also two years into looking at our business model, at how is AI going to change our competitive offering, generate revenue. Is it a threat?”
CFOs increasingly view AI as an operational mandate, with companies that hesitate risking being outpaced—both on efficiency and on cost structure, agrees Steve Sapletal, U.S. strategy practice leader at KPMG. “An ‘arms race’ for AI is underway, involving heavy investment in both acquiring top talent and building the necessary digital infrastructure.”
While the type and degree of adoption vary widely, CFOs universally cite digging more deeply into the productivity gains to be had by automating tasks within a wide range of functions as a top priority in the coming year. At the legal technology firm Litera, CFO Priyanka Singh describes a CEO companywide mandate that every employee is “expected to use AI in everything we do” that has cascaded through the company. “Just last week I had a meeting with my team where we did a show-and-tell around AI tools we’ve used,” she says. The exercise led to ideation and discussion as the company was heading into budgeting season.
The company has also embraced AI-enabled platforms that leverage automation and predictive capabilities. One example is in the pricing function, where a single employee handles questions around the price mechanism for all of the company’s products.
“He’s now using all the queries that he’s received and Copilot to come up with an agent that will enable our customers within the business to self-service versus having to answer any questions,” says Singh. “So we’ve really changed how we operate and as we think about budgeting for 2026 and growth into next year, we’ll be able to serve a lot more customers without having to scale our employee account by the same amount, which then gives us better margins.”
Weigh the new realities of build vs. buy
Another AI-related area of focus is the impact on the decision-making around whether to acquire or license capabilities or to build them in-house. “The traditional trade-off analysis of build vs. buy has been flipped on its head,” says Pickel. “With AI, brands can build more efficiently. Especially in a world where you’re trying to tap into a new, adjacent market, you can build apps and technology platforms really quickly with AI.”
That speed gives companies more latitude to test ideas, develop prototypes and validate demand at a fraction of the time and cost. “Previously, we would buy products and features that would take longer to build, but we’re now at a place where, through AI, we can build faster than buy,” says Singh. “We’ll always be somewhat acquisitive but our ability to now generate features and functionality and roll out products at a higher velocity reduces our reliance on M&A in a significant way.” AI can also support use-case development and market testing, enabling companies to more precisely evaluate whether an acquisition target will hasten market penetration or internal development is the better path.
Guard against profitless prosperity
In a year where opportunities exist but must be pursued in tandem with budget vigilance and cost discipline, the most critical metric to keep front and center may be margins. “It’s so easy to be laser-focused on a company-specific target for the year, which is usually sales or revenue,” says Saidel-Baker. “But in 2026 and 2027, margin squeeze is going to be so persistent—and I don’t think folks are ready for that.”
The danger lies in growing the top line while the bottom line quietly erodes as inflationary forces drive up the cost side of the ledger. Saidel-Baker expects this environment to differ from the margin squeeze driven by a supply chain shock that companies experienced in 2021 in which companies were able to pass price increases through to consumers because products were scarce at any cost.
In the year ahead, that playbook may not work for companies facing rising input costs and competitive dynamics that limit pricing power. Her advice: Resist the temptation to chase revenue without understanding the full cost picture. Scrutinize margin assumptions as closely as demand assumptions. Growth that doesn’t translate into profitability is not a win, says Saidel-Baker, who sees that as the trap companies are most likely to underestimate in 2026.
Recent CFO survey data from Gartner supports the risk of a challenging environment for profitability. While only 39 percent of CFO respondents reported viewing the external environment as favorable—citing tariff uncertainty, policy uncertainty and softening consumer demand, 67 percent expected to deliver more than 5 percent organic revenue growth in 2026.
“To me, that reflects the sentiment among a lot of organizations that you need to have discipline on the cost side, to make sure that your SG&A costs are in line with and not growing faster than your revenues,” says Rathindran. “SG&A is probably the first place that CFOs go to manage uncertainty because it’s controllable, and our survey results reflect that. The consensus expectation among our respondents was for SG&A to grow one to five percentage points below the revenue growth… SG&A costs have been rising significantly so they’re trying to cap the growth of those costs below the rate at which revenues are growing.”
Among the more than 60 percent of CFOs budgeting for SG&A to grow more slowly than revenue in 2026, the most commonly cited areas for budget reductions were human resources (57 percent), corporate IT (53 percent) and legal and compliance (40 percent). “Whether in the form of layoffs or reduced hiring, these reflect a rethinking of the corporate functions in the light of the potential for AI to perform many of those functions,” notes Rathindran.
Vigilance around cost control alone, however, may not be sufficient to maintain profit levels, cautions Saidel-Baker, who warns that persistent inflation may lead to dampened consumer spending for some demographics. “We’re also seeing bifurcation in the consumer base, with lower income earners getting squeezed very hard,” she says. “So this is a time for consumer-focused industry players to really, really know your consumer. We’re encouraging our clients who sell to that lower end to be prepared for a trade down in quality. Have a good, better, best model so you can keep them in your ecosystem, even if you need to add a slightly smaller package or a version with lower cost ingredients.”
Prep for tariff trouble
With tariffs now an established planning variable, CFOs need to be proactive about managing their product portfolios to reduce exposure to tariffs, says Pickel, who breaks out two options. “I can change my products slightly so that I qualify for different tariffs or no tariffs, or I can explore onshoring versus offshoring,” he says. “I think this next phase is figuring out how to operate most optimized in this new environment, which involves a combination of doubling down on where things are clear in terms of profitability without having to invest more CapEx and then exploring how Cap Ex can help support longer term healthier growth and profitability.”
Contending with tariff exposure is particularly critical—and has proven particularly challenging—for manufacturers. “A lot of people aren’t doing the work they need to do to understand tariffs,” says Harbour, who notes that manufacturing companies without the deep in-house expertise to map direct and indirect costs may not realize the full extent of their exposure. “You need to know your HTS codes, where your steel is smelted and poured and how to fill out customs paperwork appropriately, and then watch every week what the current tariffs are by country.”
Watch for blind spots
Even the most well-modeled plan can be upended by an unanticipated development, noted several CFOs, who pointed out that external forces, such as a sudden stock market correction, geopolitical turbulence or policy change could ripple into demand, capital availability and customer confidence.
A sharp foreign-exchange swing triggered by policy shifts that cause protectionist reactions, for example, could instantly reshape input costs or overseas margins, notes Perica. “Currency volatility is a wild card I would not ignore.” And a surprise policy announcement can redraw an entire competitive landscape overnight.
Howatson agrees, adding that blind spots can emerge when companies assume their home-market conditions apply everywhere. “Different parts of the globe might be experiencing these factors differently,” she says, noting that CFOs need to stay close to frontline teams and customer-facing leaders. “More than ever, we in finance need to really understand what they’re facing.” Geopolitical developments, shifts in consumer demand or policymaking in Asia, Europe, the UK, Canada or other key trading partners can carry over to the U.S., calling for corresponding adjustments to sales allocation, volume expectations or pricing strategy.
In an environment where shocks can come from anywhere, CFOs must not only push efficiencies forward and adopt a disciplined and agile plan for growth but also cultivate a wide field of vision.
“That’s what makes it an exciting time to be in finance,” says Howatson. “We’re needed more than ever to be looking around corners, staying attuned to what economists are saying and what their predictions are and knowing what that all means in terms of how we can best serve our customers. It’s an exciting opportunity.”
