Reducing high unemployment rates, curbing entitlement spending, and reforming burdensome federal regulations are ways to resuscitate the U.S. economy, according to a survey of senior executive CPAs in New York, New Jersey and Pennsylvania by their respective state CPA societies.
Nearly half the respondents -- who primarily were chief executive and chief financial officers, accounting firm partners and other industry leaders residing in the three states surveyed -- said that economic conditions in the U.S. will likely be the same one year from now. While they predict increases in their own business revenues, they are expecting little change in the U.S. workforce.
When CPAs were asked to rate the red tape in state and local governments, New York fared the worst, with 59 percent of respondents indicating it was worse than ever, followed by Pennsylvania (42 percent) and New Jersey (39 percent).
A majority of CPAs polled in the three states said employees are considering delaying retirement, with more than 70 percent noting that the struggling economy was the biggest factor in the decision.
In addition, more than 90 percent of the CPAs said that the implementation of the Affordable Care Act is prompting them to re-evaluate their current insurance packages, with a majority of them saying that they are postponing their hiring decisions and increasing the number of part-time employees. The growth of pension funding and entitlement spending - for health care, disability, and unemployment compensation - coupled with a sharp decline in the number of working adults has stalled economic growth, the CPAs assessed.
In New York State, three in five CPAs believe that their state government red tape is worse than ever. Only three in 10 (28 percent) New Jersey CPAs believe the business climate in the state is excellent or good, and a majority (58 percent) believe the state's business climate hinders economic growth. More than half (56 percent) of the state's CPAs, however, say there has been noticeable improvement in the state's business climate since Gov. Christie took office in January 2009.
Nearly half (48 percent) of Pennsylvania CPAs rank rising health care costs and pension funding for public employees as the top two state issues that will hinder future economic growth in Pennsylvania. Significantly more CPAs in Pennsylvania (23 percent) feel that the tax structure in their state is better than in most other states when compared to CPAs in New York (4 percent) and New Jersey (2 percent).
AICPA ECONOMIC OUTLOOK SURVEY
In contrast, the American Institute of CPAs also released its quarterly survey of the economic outlook from CPA business executives nationwide. The AICPA survey found that the business executives it polled across the country remain optimistic about their companies' prospects for the coming year, but that sentiment is offset by deeper pessimism about the U.S. economy.
This may have implications for hiring plans, according to the fourth quarter AICPA Economic Outlook Survey, which polls CEOs, CFOs, controllers and other CPAs in U.S. companies who hold executive and senior management accounting roles.
Executives in the survey usually have a much more positive outlook for their own organization than for the U.S. economy. This quarter, though, the outlook for individual companies is up slightly (57 percent positive, compared to 55 percent last quarter), while optimism about the U.S. economy is falling (38 percent positive, down from 44 percent a quarter ago). That split view is evident in hiring plans, which appear to be softening after increasing last quarter. Business expansion expectations are virtually identical to last quarter, with 62 percent of executives saying they expect to grow at least a little in the coming year. There is a slight decrease, however, in the proportion of poll respondents who said they are looking to hire immediately (13 percent, down from 15 percent last quarter), and headcount increase projections fell one-tenth of a percentage point from 1.3 percent to 1.2 percent in the past quarter.
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