Our Accountants Confidence Index is balancing on either side of contraction, predicting a shrinking economy in the short term, and very, very, very modest growth in the mid-term -- though they seemed a little bit more optimistic in the run-up to the election.
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 rose from last month, perhaps in hopes that the presidential elections would bring some certainty to the economy. The 3-Month ACI came in at 49.37 -- the closest to growth that it's been in some time -- while the 6-Month ACI rose to 52.2.
A reading under 50 indicates that the panel expects a contraction.
The panelists maintained relatively positive forecasts for almost all the components of the index -- with the significant exception of their expectations for large companies, which dropped a fair amount (after an unusual rise in the previous month).
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).