Business executives who are also CPAs are becoming more cautious in their view of the U.S. economy and their own business’s growth prospects, according to a new survey.

The dampened perspective comes after two consecutive quarters of exuberant optimism, according to the second-quarter AICPA Economic Outlook Survey, which polls CEOs, CFOs, controllers and other CPAs at U.S. companies who have executive and senior management accounting positions.

According to the survey, 74 percent of the business executives polled said they were optimistic about the economy in the next 12 months, but that was down five percentage points from the first quarter of the year, when there was a record high of 79 percent. Some of the decline was prompted by concerns about trade and political uncertainty. Indeed, on Thursday, the Trump administration announced tariffs on aluminum and steel imports from the European Union, Mexico and Canada, and the EU and Mexico in response announced retaliatory measures.

AICPA Economic Outlook Survey

According to the AICPA survey, optimism among CPA executives about their own company’s outlook dipped one percentage point to 70 percent from 71 percent. But both sentiments were in the uppermost range of post-recession assessments. The percentage of business executives who anticipate their company will expand in the year ahead declined from a post-recession high of 72 percent last quarter to 70 percent.

The CPA executives who responded to the survey also dampened their expectations for profit and revenue growth over the next 12 months. Their profit growth estimates declined from 4.4 percent in the first quarter to 4 percent in the second quarter, while revenue growth projections went from 5 percent to 4.8 percent.

Inflation concerns, which jumped significantly in the first quarter, stayed unchanged in the second quarter. Technology showed some weakness in sector optimism, falling from 80 percent in the first quarter to 69 percent in the second quarter. Hiring expectations for the industry slid from 2.5 percent anticipated growth in the next 12 months to 2.1 percent, but technology spending plans stayed robust.

“Despite their more tempered views on growth, business executives still see a strong hiring picture over the next year,” stated Arleen R. Thomas, managing director of Americas Market, Global Offerings & CGMA Exam, Management Accounting for the Association of International Certified Professional Accountants. “Labor market tightness continues to be a concern, with companies encountering difficulty in recruiting candidates with the right skills.”

Labor costs were the highest-ranking inflation concern for 39 percent of the survey respondents. Raw materials cost concerns increased from 25 to 31 percent, while interest rate concerns slid from 22 to 18 percent. Some of the other concerns identified by the CPA executives who responded to the poll included freight, drilling rig expenses, drug costs and foreign exchange.

The proportion of employers who indicated they intended to hire immediately increased three percentage points to 30 percent in the second quarter. Another 13 percent said they had too few employees but were hesitant to hire. That figure was down a percentage point from the first quarter. In all, 48 percent of the CPA business executives polled said their companies currently possess the right number of employees, but “availability of skilled personnel” was still the No. 1 challenge for businesses for the fourth consecutive quarter on the survey.

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