Global Liquidity Survey reveals cash management trends

Global Liquidity survey reveals current and emerging corporate cash management trends

The US economy continued to grow in 2024, inflation remained above the Federal Reserve’s 2% target, and the Federal Open Market Committee (FOMC) took a pause after marginally loosening policy rates. It is worth noting that a new administration took center stage in the US with an aggressive agenda including tariffs which created significant market volatility at about the same time this annual survey was in the field.

Key survey insights include:

• Investment policies continue to prioritize safety, liquidity, and yield, with safety being the most valued objective for 61% of organizations, although this is a slight decrease from the previous year. Liquidity has gained importance, cited by 35% of respondents, while yield remains relatively unchanged at 5%.
• Organizations that are net borrowers anticipate a significant impact on their cash balances, with 26% predicting a decrease in the next two quarters. Overall, 21% of respondents expect lower cash balances, with smaller organizations (annual revenue less than $1 billion) being more affected.
• The survey highlights changes in cash holdings over the past year, with 38% of corporate practitioners reporting increased cash holdings within the U.S., although this is lower than the previous year. Outside the U.S., 65% of organizations reported unchanged investments, indicating a consistent approach to cash management globally.
• Drivers of changes in cash holdings include increased operating cash flow, decreased capital expenditures, and geopolitical risks. Inflationary impacts and increased capital expenditures are significant factors contributing to decreased cash holdings.

Change in Cash and Short-term Balances over the Past 12 Months: U.S. and Non-U.S. Cash Holdings

(Percentage Distribution of Organizations)

Overall, the survey suggests a cautious approach to cash management, with organizations balancing safety and liquidity while navigating economic uncertainties.

How does your organization compare?

We are proud to partner with the Association of Financial Professionals (AFP) to sponsor the 2025 AFP Liquidity Survey, marking the sixth year Invesco has sponsored this industry-leading research.