Business Executives' Mixed View on Economy Reflects Continued Uncertainty, AICPA & CIMA Survey Finds

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Dec 07, 2023, 08:41 ET

Inflation returns as top concern
Profit expectations tick up slightly
Hiring outlook shows signs of softening

NEW YORK, Dec. 7, 2023 /PRNewswire/ -- Business executives don't have a strong sense of where the economy is headed, and their mixed-bag outlook reflects that, according to the fourth-quarter AICPA & CIMA Economic Outlook Survey. The survey polls chief executive officers, chief financial officers, controllers and other certified public accountants in U.S. companies who hold executive and senior management accounting roles.

Twenty-four percent of survey respondents expressed optimism about the outlook for the U.S. economy over the next 12 months, a drop of 5% from last quarter, That continues a volatile trend of advance and retreat in economic optimism over the past year, a sign of the uncertainty business executives feel about the path ahead.

Inflation returned as the top concern cited by business executives after falling to No. 2 last quarter, and only 27% dismiss the prospect of a recession next year. Yet profit and revenue growth expectations for the next 12 months were largely unchanged from last quarter, with the profit outlook rising a tick from 0.1% to 0.5% and revenue growth projections slipping a bit from 1.9% to 1.8%.

"We're seeing some softening on the hiring front and IT spending, which are classic areas of belt-tightening in uncertain times," said Tom Hood, the AICPA & CIMA's executive vice president for business engagement and growth. "At the same time, business executives' expectations for their own organization's prospects over the next year are down just a bit from the third quarter and ahead of where they were a year ago. So, there's a lot of mixed signals right now on the economy."

Twelve percent of business executives said they had too many employees, up four percentage points from last quarter. Some 38% said they have too few employees, but the percentage who said they were hesitant to hire because of economic uncertainty increased from 14% to 16%.

The AICPA survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months. In comparison, the U.S. Department of Labor's November employment report, scheduled for release tomorrow, looks back on the previous month's hiring trends.

Other key findings of the survey:

Expansion plans fell slightly from 50% to 48% this quarter
Business executives less optimistic about their own company's prospects over the next 12 months (43% vs. 45% last quarter), although they are still ahead of where they were a year ago (35%).
Some 28% of business executives said they expected their companies to raise prices by year end, down from 37% last quarter. Sixty-three percent said they expected no change, while 2% said they anticipated decreases.

Methodology

The fourth-quarter AICPA & CIMA Economic Outlook Survey was conducted from Nov. 7-28, 2023, and included 316 qualified responses from CPAs and Chartered Global Management Accountants (CGMAs) who hold leadership positions, such as chief financial officer or controller, in their companies. The overall margin of error is less than 3 percentage points. A copy of the report can be found on aicpa.org.

About the Association of International Certified Professional Accountants, and AICPA & CIMA

The Association of International Certified Professional Accountants (the Association), representing AICPA & CIMA, advances the global accounting and finance profession through its work on behalf of 698,000 AICPA and CIMA members, students and engaged professionals in 188 countries and territories. Together, we are the worldwide leader on public and management accounting issues through advocacy, support for the CPA license and specialized credentials, professional education and thought leadership. We build trust by empowering our members and engaged professionals with the knowledge and opportunities to be leaders in broadening prosperity for a more inclusive, sustainable and resilient future.

The American Institute of CPAs (AICPA), the world's largest member association representing the CPA profession, sets ethical standards for its members and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state and local governments. It also develops and grades the Uniform CPA Examination and builds the pipeline of future talent for the public accounting profession.

The Chartered Institute of Management Accountants (CIMA) is the world's leading and largest professional body of management accountants. CIMA works closely with employers and sponsors leading-edge research, constantly updating its professional qualification and professional experience requirements to ensure it remains the employer's choice when recruiting financially trained business leaders.

SOURCE AICPA & CIMA