Business confidence in the U.S. declined in the second quarter and is now at its lowest level since the fourth quarter of 2016, according to a new report from the Association of Chartered Certified Accountants and the Institute of Management Accountants based on a survey of accountants.

Forty-five percent of the accountants polled at U.S. companies for the ACCA’s and the IMA’s second quarter Global Economic Conditions Survey cited rising costs as their main concern, followed by decreased income (35 percent). The least cited reasons for concern among the accountants polled were customers going out of business (14 percent) and suppliers going out of business (6 percent).

Despite the dip in business confidence in the U.S., North America remained the most confident region in the Q2 report, followed closely by South Asia. Confidence levels were lowest in the Middle East.

“The drop in confidence comes amid challenges for the new administration in its first year in office; the planned stimulus package of tax cuts and infrastructure spending is likely to be delayed until 2018 at the earliest, as the government continues to focus on healthcare reform,” said ACCA senior business analyst Narayanan Vaidyanathan in a statement. “As a result, businesses are uncertain about the short term. However, the survey also shows that fundamentals driving longer term prospects still look encouraging: the employment index is relatively high and excluding the fall compared to the previous quarter, is above levels seen since the last quarter of 2015. Coupled with reasonable real wage growth, a longer-term uptick looks a realistic prospect.”

Anticipated growth in the U.S. economy has had a positive result on several other economies covered by the GECS survey.

ACCA and IMA Q2 GECS report

“A combination of this consumption growth driving recovery in the U.S. and a gentler than expected slowdown in China has led to a fairly positive global outlook for this quarter,” said IMA vice president of research and policy Raef Lawson in a statement. “The IMF recently upgraded its forecasts for global growth to 3.5 percent in 2017 and 3.6 percent in 2018, up from just 3.1 percent last year. Given the improving outlook, this is looking achievable.”

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Michael Cohn

Michael Cohn

Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.