Optimism about the U.S. economy among business executives who are also CPAs improved in the second quarter and has reached its highest point since early 2007, according to a new survey by the American Institute of CPAs, but lingering concerns continue to curtail hiring plans.
The AICPA Economic Outlook Survey polled CEOs, CFOs, controllers and other CPAs at U.S. companies who hold executive and senior management accounting roles.
While just 49 percent of the survey respondents described themselves as optimistic or very optimistic about U.S. economic prospects, that represented an increase from the 32 percent who expressed their optimism at the start of the year. Consumer spending and more favorable housing and employment trends were cited as factors for the CPA executives’ improving view of domestic conditions. For comparison’s sake, the low point for this category came in the third quarter of 2011, when only 9 percent of CPA executives described themselves as optimistic.
The CPA Outlook Index—an overall gauge of executive sentiment within the survey—rose three points to 69 for the quarter, matching a post-recession high last reached in the first quarter of 2012. The index is a composite of nine, equally weighted survey measures set on a scale of 0 to 100, with 50 considered neutral and greater numbers signifying positive sentiment. For the second straight quarter, all components of the index rose, with U.S. economic optimism the sole double-digit climber.
“In addition to holding a more optimistic view of the economy, executives are feeling much better about their own business prospects,” said AICPA senior vice president for management accounting and global markets Arleen R. Thomas in a statement. “Some three out of five companies are now expecting to expand over the next 12 months.”
Executives who said they were optimistic about their company’s prospects increased from 50 percent to 57 percent, quarter over quarter—the highest level for this category since the first quarter of 2011. Yet hiring plans remain limited, with survey takers only projecting headcount growth of one percent over the next year, down slightly from last quarter.
Profit and revenue expectations continued to track upwards in the survey, though at a modest pace. Asked about their hiring plans, 57 percent of the CPA business executives polled said their companies have the right number of employees, while 12 percent indicated they plan to hire soon, the same as last quarter. The construction and technology sectors are expected to see the biggest job growth.
In terms of the top challenges cited by CPA business executives, “regulatory requirements/changes” has displaced “domestic economic conditions” as the top challenge for organizations, with “employee and benefit costs” in third place.