CPA Execs Grow More Confident about U.S. Economy
The latest Economic Outlook Survey found CPA executives are growing more confident about the U.S. economy over the next 12 months. In fact, 37 percent of survey takers now express optimism about the U.S. economy, which is up from a three-year low of 28 percent last quarter. The survey, which polls CEOs, CFOs and other CPAs who hold executive positions in U.S. companies also found that expectations for profit and revenue both increased this quarter.
The AICPA survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months.
The brightest spot for the economy this quarter was likely the outlook on hiring, with 19 percent saying their organizations are ready to hire immediately, up from 15 percent last quarter. The percentage of executives who say their company needs employees but are reluctant to hire also increased from 16 percent last quarter to 18 percent.
“The good news is the slide in sentiment about the U.S. economy has reversed course and key performance indicators are pointing back up,” said Arleen R. Thomas, CPA, CGMA, the AICPA’s senior vice president of management accounting and global markets.
The CPA Outlook Index—a comprehensive gauge of executive sentiment within the AICPA survey—is a composite of nine, equally weighted survey measures. The index rose five points in the second quarter to 68, but remains below a post-recession high of 78 set in the fourth quarter of 2014.
“There’s a long way to go to get back to the levels of optimism we saw in late 2014 and early 2015. On top of that, the presidential election and global economic uncertainty add some wild cards going forward,” Thomas added.
Additional survey findings:
- Hiring outlook ticks upwards.The projected headcount increase for the next 12 months rose to 1.1 percent from 0.5 percent last quarter. Business executives have some concern about the talent pool, however – “availability of skilled personnel” rose two spots to the No. 3 top challenge for businesses in the quarter.
- Survey takers have a stronger view of their own companies’ prospects.In the first quarter, optimism about business executives’ own organizations fell beneath 50 percent for the first time since the end of 2012. This quarter, that category increased nine percentage points to 53 percent.
- Expansion viewed as increasingly likely. Fifty-eight percent of business executives said they expect their companies to expand in the next 12 months, up six percentage points from last quarter.
- Tech is top spending priority.Technology continues to be the strongest category for anticipated spending growth, climbing 0.3 percentage points from last quarter to 2.6 percent.
The next AICPA Economic Outlook Survey will be out in early September.
James Schiavone, Senior Manager – Public Relations, American Institute of CPAs