Chief financial officers and senior-level executive CPAs are feeling more optimistic about the economy and the prospects for a recovery next year, according to a new survey.

The survey, conducted by the AICPA and the University of North Carolina’s Kenan-Flagler Business School, showed that optimism rose in the current quarter to 26 percent from the 19 percent of respondents who said they were optimistic three months ago (see CFOs and CPA Execs More Optimistic About Economy).

“The confidence rally among CPA financial executives continued for the second consecutive quarter,” said AICPA senior vice president for member competency and development Arleen Thomas.

Forty-one percent of CPA executives expressed pessimism about the U.S. economy over the next 12 months, a decline of 12 percentage points from the second quarter’s 53 percent of respondents who said they were either “pessimistic” or “very pessimistic” about the economy. Thirty-three percent considered themselves “neutral” compared to the 28 percent recorded in the last survey.

Thirty-nine percent of the survey's respondents said they were “slightly more confident” about the economy than they were last quarter. However, 62 percent still expect the downturn to last until 2010. Twelve percent said the recovery would occur in 2011 or later.

Survey respondents said that increases in consumer spending (32 percent) and improvement in the housing market (25 percent) will be the two primary drivers of business improvement. Sixteen percent said they were looking for an increase in manufacturing to be a primary driver of improvement in their own businesses.

Forty-two percent expect a decrease in revenue over the next 12 months, an 11-percentage-point decline in negative revenue expectations from 53 percent in the first quarter. Thirty-four percent expect a reduction in employment, down 11 percentage points from the 45 percent who said three months ago that they expect the number of employees to decrease.

Sixty-two percent of respondents expect that the prices they charge will remain the same or decrease. As in the second quarter, more than half expect their salaries and corporate benefits packages, excluding health care costs, to stay the same or decrease.

Customer demand and health care costs are the top challenges facing companies, according to respondents. Access to capital has dropped from No. 2 to No. 3 in comparison to the second quarter. Avoiding layoffs dropped from No. 7 to No. 9.

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