CPA Outlook Index Finds Increased Optimism for US Economy, Lowered Expectations Elsewhere
The AICPA’s CPA Outlook Index (CPAOI) fell four points in the first quarter, the first time the Index has dropped in more than two years. The Index, which polls chief executive officers, chief financial officers and controllers, found these executives were tempering their expectations for profit, revenue and expansion in the coming year.
Optimism about those key performance indicators still remains high, but the survey found a decline in sentiment since last quarter. The one survey measure to rise from the previous quarter was sentiment about the US economy, which found that 68 percent of respondents are now optimistic about the U.S. economy, a new high for the survey.
The CPAOI, a composite of nine, equally weighted survey measures, where 50 is considered neutral and greater numbers signify positive sentiment, registered a 74 in the first quarter
“It’s important to note that we’re seeing higher optimism on most business indicators we track than we did a year ago. But it’s also clear we’re seeing a reset this quarter on expectations for several key categories, and that’s something to be mindful of going forward,” said Arleen R. Thomas, CPA, CGMA, senior vice president of management accounting and global markets at the AICPA.
The AICPA survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months. As a point of comparison, the U.S. Department of Labor’s February employment report, which was released earlier today, looks back on the previous month’s hiring trends.
Among other findings of the survey:
- “Regulatory Requirements/Changes’ remains the top challenge for businesses, with “Domestic Competition” now the number two challenge, up three spots from last quarter.
- Some 64 percent of businesses said they expect to expand in the next year, down from 71 percent last quarter.
- Some 47 percent of survey takers said the decline in oil prices has had a somewhat positive impact on their business, while 28 percent said it was neutral.
- The number of survey takers who said their businesses are hiring immediately dropped slightly from 23 percent last quarter to 21 percent this quarter. A majority of respondents (52 percent), however, continue to say they have the right amount of employees.
- Anticipated growth for profits in the coming year dropped from 3.9 percent last quarter to 2.8 percent. Revenue growth expectations also fell from 4.7 percent to 3.6 percent.
James Schiavone, Media Relations Manager, American Institute of CPAs.