Business executives who are also CPAs are feeling more optimistic about the U.S. economy than they have in more than 12 years, according to a new survey by the American Institute of CPAs.

Optimism about the prospects for the U.S. economy climbed from 62 percent last quarter to 69 percent in the first quarter of this year, the highest it’s been since the 71 percent level it reached at the end of 2004, the first year the survey was conducted. The AICPA Economic Outlook Survey regularly polls CEOs, CFOs, controllers and other CPAs at U.S. companies who hold executive and senior management accounting roles.

Sentiment about the economy has gone up and down in recent years. Optimism reached a low of 28 percent a year ago, but climbed as high as 68 percent in the same quarter of 2015.

AICPA Economic Outlook Survey

Business executives are also feeling good about the outlook for their own companies in the year ahead, with 66 percent of them expressing optimism. That's an improvement from the 61 percent in the fourth quarter and 44 percent a year ago. Rising expectations for profits and revenue have increased over the past year.

“We saw a big jump in economic optimism following the election, and that has been reinforced and extended in our latest results,” said Arleen R. Thomas, the AICPA's managing director of Americas market, global offerings and CGMA Exam, in a statement. “Much of this positive sentiment is due to expectations of lower corporate taxes and reduced regulation under the new administration. I expect business executives will be monitoring progress on these goals closely.”

The survey also found that 67 percent of the CPA business executives polled said their companies plan to expand in the coming year, up from 62 percent in the fourth quarter. The business executives see growing signs of tightness in the labor market. “Availability of skilled personnel” is again one of their top three concerns, and “staff turnover” is No. 9 on the list. A 51 percent majority of respondents now say their companies plan to increase spending for skills training and staff development.

Twenty-two percent of the CPA business executives polled said their organizations are ready to hire immediately, up two percentage points from the previous quarter. Most of them said their companies had enough employees.

An 81 percent majority of the poll respondents anticipate a substantial reduction in the federal corporate income tax, but half of them don't think corporate tax reform will be enacted until at least 2018. Eighteen percent of the respondents believe a cut to a range of 15 to 20 percent would have a significant impact on their companies' bottom line, while 33 percent said it would have a moderate or slight impact and 43 percent predicted it would have no impact. Tax savings from a federal corporate income tax cut would probably be used for capital expenses, not new hiring, according to the survey respondents.

The 12-month profit and revenue growth expectations (3.5 percent and 4.3 percent, respectively) of the CPA business executives polled now stand at their highest level since the end of 2014. One out of three executives in the poll now list inflation as a concern, up from 28 percent last quarter and 14 percent a year ago.

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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.