AICPA Economic Outlook Survey: Second Quarter Results

Jun 8th 2012
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By Terri Eyden

The second quarter AICPA Economic Outlook Survey reveals that business executives are more guarded about the twelve-month outlook for the US economy than they were last quarter. The survey polls CEOs, CFOs, controllers, and CPAs in executive and senior management accounting roles. While most continue to see better prospects for their own companies than for the economy as a whole, their concerns about hiring have grown stronger since the beginning of 2012. 

The CPA Outlook Index (CPAOI) ‒ a comprehensive gauge of executive sentiment within the Economic Outlook Survey ‒ fell two points, to 67, after two straight quarters of improvement. The second-quarter decline mirrors last year's trend, when a surge of optimism in the first quarter was later tempered by fears of a stalled recovery.

"What we're seeing is the same 'two steps forward, one step back' cycle we encountered last year", said Arleen R. Thomas, CPA, CGMA, the AICPA's senior vice president for management accounting. "There's no question survey takers have grown more pessimistic about the US economy, and with expectations muted for profit, revenue, and employment growth, there appear to be few catalysts to change that view."


US Economy Optimism:

  • There's an overall 9 percent drop this quarter.
  • 34 percent describe themselves as optimistic or very optimistic about domestic conditions, down from 43 percent.
  • Optimists most frequently mention improved unemployment, the housing market, and generally improving economic indicators.
  • Pessimists are most concerned about debt and continued unemployment.
  • Respondents who are neutral pointed to the upcoming elections, politics, the situation in Europe, and uncertainty in general.

Organization Optimism: 

  • 54 percent continue to feel upbeat about prospects for their own companies or organizations.
  • 13 percent express pessimism.
  • 33 percent of respondents are concerned about inflation, down from 37 percent last quarter.
  • Concerns about energy costs dropped, while concerns about interest rates rose to the highest level in a year.
  • Respondents remain most concerned about raw material costs.

Business Expansion: 

  • 61 percent of senior-level CPAs said they expect their companies to expand over the next twelve months, a number unchanged from the first quarter.
  • 62 percent of businesses with more than $1 billion in sales said they plan to expand, down from 65 percent last quarter.


  • 56 percent said they have the right number of employees.
  • 10 percent said they have too many employees.
  • 12 percent said they plan to hire soon, compared to 14 percent last quarter.
  • 50 percent who are eager to hire said they are having trouble finding job candidates with the right skills.
  • 21 percent said they need people but are hesitating to hire until further uncertainty is resolved.
  • Overall, the total percentage of organizations needing employees remains stable, leaving long-term prospects unchanged.

Revenues, Profits, and Spending:

  • Respondents expect revenue to grow an average of 3.1 percent, down from 3.5 percent last quarter.
  • Profits are expected to increase 2.6 percent, down from 2.9 percent last quarter.
  • Prices paid are expected to increase by 1.9 percent, down from 2.1 percent.
  • Prices charged are anticipated to increase by 1.2 percent, down .2 percent from last quarter.
  • Expectations for salary increases remain stable this quarter at 2.0 percent.
  • Respondents still expect to increase spending, but those increases remain small.
  • Respondents continue to expect to increase IT spending by 2.8 percent and other capital spending by 2.0 percent, about the same as last quarter.
  • Training spending is expected to increase 1.2 percent, down from 1.4 percent last quarter.
  • Marketing spending is expected to increase 1.5 percent, down from 1.8 percent.
  • R&D spending is expected to increase 1.0 percent, down from 1.2 percent last quarter.

Top Ten Challenges:

  1. Domestic economic conditions (same as last quarter).
  2. Regulatory requirements/changes (same as last quarter).
  3. Employee and benefit costs (same as last quarter).
  4. Domestic political leadership (moved up from fifth).
  5. Domestic competition (moved down from fourth).
  6. Stagnant/declining markets (remained in sixth place).
  7. Global economic conditions (moved up from tenth).
  8. Availability of skilled personnel (moved up from ninth).
  9. Developing new products/services/markets (moved down from seventh).
  10. Materials/supplies/equipment costs (moved down from eighth).


The second quarter AICPA Business and Industry Outlook Survey was conducted from May 16‒31, 2012, and included 1,250 qualified responses. The overall margin of error is less than plus-or-minus 3 percentage points. A copy of the full report can be found online.

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