AICPA Economic Outlook Survey: CPA Execs More Optimistic about Hiring
Drop in Economic Optimism
After rising to the highest post-recession level in the second quarter of this year, the percentage of survey respondents who are optimistic about the US economy fell in the third quarter from 49 percent to 44 percent. However, this lack of economic optimism translated to only a 2 percent decline – 57 percent to 55 percent – in CPAs who are optimistic about the prospects for their own organization.
Those who continue to be optimistic about the economy cite improvements in housing and construction and consumer spending as the most significant factors influencing their decision, followed by employment optimism. Those with a neutral or pessimistic view of the economy cited the challenges of health care reform and the Affordable Care Act as well as political leadership as the most significant factors.
Additional Key Survey Results
- Concerns about inflation continue to be relatively low: 35 percent of CPA respondents are concerned about the prospects for inflation over the next six months, slightly up from 30 percent in the second quarter. Only 7 percent expressed concerns about deflation, which remains consistent with the second quarter.
- Labor costs, which surpassed raw materials costs as the factor representing the most significant risk to business in the second quarter, continues to be the greatest concern and increased again, from 28 percent last quarter to 31 percent in the third quarter. Concerns about interest rates also rose this quarter to 26 percent of respondents, up from 21 percent in the second quarter. These increases were offset by corresponding declines in concerns about both raw materials and energy costs.
- The majority of the respondents' organizations continue to have at least as much cash, with only 22 percent needing to raise capital, up slightly from 19 percent first quarter. On an overall basis, 37 percent have more than they need, and 42 percent have about the right amount. The number of companies expecting to deploy excess liquidity increased again this quarter to 16 percent.
- Thirty percent of respondents believe finance and accounting contribute to innovation to a large or greater extent; yet 74 percent of respondents believe the finance and accounting function should play an important or extremely important role in innovation efforts.
Top Three Challenges Remain the Same
The top three obstacles facing business executives in the third quarter were the same obstacles they faced during the second quarter. Those include:
1. Regulatory requirements/changes
2. Domestic economic conditions
3. Employee and benefit costs
"I think a lot of those concerns are being driven by the unknown of the new health care legislation, and those challenges are the things that kind of temper hiring a bit," Morrison concluded. "But even though those concerns are out there, what is a little surprising – in a positive way – is the uptick in the hiring outlook."
About the survey:
The AICPA Business & Industry US Economic Outlook Survey 3Q 2013 was conducted between August 13 and 29 and included 1,228 qualified responses from CPAs who hold executive and senior management accounting roles. CFOs comprised 46 percent of the respondents, 23 percent were controllers, 11 percent were CEOs or presidents, 10 percent were vice presidents, 2 percent were COOs, and the remainder were directors or other executives.
Sixty-eight percent of respondents came from privately owned entities, 16 percent from publicly listed companies, 12 percent from not-for-profits, 1 percent from government, and 1 percent from other.
Eleven percent came from organizations with annual revenues of $1 billion or more, 21 percent from organizations with $100 million to under $1 billion in annual revenues, 45 percent from organizations with $10 million to $100 million in annual revenues, and 21 percent from organizations with under $10 million in revenues. (Numbers may add to more than 100 due to rounding.)
The overall margin of error is less than +/- 3 percentage points.
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