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CPAs in Business and Industry Optimistic for 2014 Revenue Growth

Revenue-growth-2014The end of the year is always a good time to reflect on the past and consider the future. So perhaps it’s no surprise that the latest AICPA Business and Industry Economic Outlook Survey has inspired me to share some of my reflections and thoughts with you.

Thinking back to the fourth quarter of 2012, CPAs in industry were deeply concerned about the economy, especially with the “fiscal cliff” looming large. Fortunately, we had a last minute resolution to the dilemma on December 31, 2012 and concerns about the overall economy and politics abated somewhat in the first half of 2013. Optimism about the US economy improved, and the number of CPAs saying they were optimistic about their companies and having plans to expand also increased.

However, underlying concern continued about ongoing political issues, including the sequestration budget cuts and the Affordable Care Act. This concern was certainly warranted. Just as we moved into the fourth quarter of 2013, we had the government shutdown over the 2014 budget negotiations, related primarily to these issues.

Looking at our fourth quarter 2013 survey results, while CPAs in business and industry have soured a bit on the overall US economy, they’re optimistic about revenue and profits in their own businesses. CPAs working in the IT sector are the most bullish bunch, as the survey indicates increases in spending on IT infrastructure. The outlook in manufacturing and construction is also positive with both sectors projecting stronger plans for hiring than in the third quarter. On the other hand, the retail sector is cause for concern in terms of both optimism and hiring, softening somewhat on both fronts.

On the Friday after our fourth quarter survey results were released, the Labor Department reported that the number of jobs created in November was a higher-than-expected 203,000 and the US rate of unemployment fell to 7.0%, its lowest level in five years. December survey results from the National Association of Business Economists also predict a higher growth rate for 2014 and a jobless rate averaging this 7.0% level.

Hopefully, this positive employment news will translate into strong holiday spending and have a favorable impact on the retail sector as we finish out 2013 and turn the corner into 2014. 

Arleen Thomas, CPA, CGMA, Senior Vice President - Management Accounting and Global Markets, American Institute of CPAs.

Revenue Growth image via Shutterstock

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