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Accountants Confidence Index - December 2012

November 23, 2012

Our Accountants Confidence Index dropped fairly steeply this month, with two main possible culprits: First, our panelists may not have been pleased with the results of the election -- the accounting profession's political action committees had, overall, supported Gov. Romney's presidential bid -- but given that they seemed optimistic in the previous month, it seems likely that the devastation caused by Hurricane Sandy, which was still being assessed as we polled our Executive Research Council, plays a bigger role in the decline in the December ACI. 

The ACI, created in partnership with ADP, is a monthly economic indicator that leverages the insights of accountants into the strength and prospects of businesses in the U.S. Both the 3-Month and 6-Month ACI readings for this month dropped, with both now expecting contraction, where they had been split before. The 3-Month ACI came in at 47.53, while the 6-Month ACI dipped into contraction with a reading of 49.86.

A reading under 50 indicates that the panel expect the economy to shrink.

All of the index's components dropped, with bigger declines generally marked in the short-term -- though our panelists' expectations for the U.S. economy in the mid-term showed the biggest single point drop, from over 51 in the previous month, to an extremely low 45.19.

The ACI is created from a monthly poll of the Accounting Today Executive Research Council, an online community of more than 1,500 tax and accounting professionals, who are asked to provide their estimates of the growth prospects of their own firms, their small, midsized and large business clients, and of the U.S. economy as a whole. Their responses are weighted and averaged to produce the ACI.

Accountants Confidence Index

The 3-month and 6-month readings are averages of the ERC's growth predictions, weighted most heavily toward their forecasts for their small-business clients (with a weighting of 4), midsized business clients (3), large-business clients (2), and for their own firms and for the U.S. economy as whole (1 each).

Index Components

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