CPA Executives Express Strong Optimism in US Economyby
Senior-level executive CPAs had a far bigger jump in optimism about the US economy for 2017 than their own organizations, according to the fourth quarter Economic Outlook Survey from the American Institute of CPAs (AICPA).
The survey of CPA business decision-makers tracks hiring and business-related expectations for the year ahead.
US economic optimism jumped 12 points year-over-year, from 64 in the fourth quarter of 2015 to 76 a year later, according to the CPA Outlook Index, which measures executives’ expectations in nine economic indicators over the next 12 months.
But organizational optimism, which exceeded economic optimism a year ago, rose four points, from 70 (Q4 2015) to 74 (Q4 2016).
Profits showed a healthy gain, rising year-over-year from 67 to 74. In addition, revenue and expansion plans each rose four points.
“We’re seeing renewed confidence in the US economy, building on the encouraging signals on the outlook for revenue, profit, and business expansion we saw in the third quarter,” Arleen Thomas, CPA, CGMA, managing director, Americas and global offerings at the AICPA, said in a prepared statement.
The overall CPA Outlook Index nudged upward to 74 in the forth quarter, a year-over-year gain of five points when all nine indicators are considered.
In addition to the year-over-year increases in economic optimism, organizational optimism, profits, revenue, and expansion plans, the remaining four indicators either stayed flat or rose slightly compared to the fourth quarter of 2015.
- IT spending: Remained at 77.
- Other capital spending: Up a point, from 72 to 73.
- Training and development: Up three points, from 68 to 71.
- Employment: Up one point, from 67 to 68.
Meanwhile, the top 10 challenges facing organizations include:
- Regulatory requirements/changes.
- Employee and benefits costs.
- Domestic economic conditions.
- Availability of skilled personnel.
- Domestic competition.
- Developing new products/services/markets.
- Domestic political leadership.
- Changing customer preferences.
- Stagnant/declining markets.
- Staff turnover.
The survey was conducted in November and included 600 qualified responses from CPAs who hold leadership positions, such as CFOs and controllers, at their companies. The majority (69 percent) were from private companies, 17 percent from public companies, and 12 percent from nonprofits. Nearly half (45 percent) of respondents work for companies with $10 million to under $100 million in annual revenues, while 22 percent were from companies with $100 million to less than $1 billion in annual revenues.
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.