Stat Corner

CPA Outlook Index Survey 1Q 2016

The CPA Outlook Index—a comprehensive gauge of executive sentiment within the AICPA survey— has fallen to its lowest level in more than three years.  Some 28 percent of survey respondents identified themselves as “optimistic” or “very optimistic” about prospects for the U.S. economy over the next 12 months, down 17 percentage points from last quarter and 40 percentage points from a year ago. The index is a composite of nine, equally weighted survey measures set on a scale of 0 to 100, with 50 considered neutral and greater numbers signifying positive sentiment.

CPA Outlook Index Graph

Other key findings of the survey:

  • Renewed softness in hiring outlook. Some 15 percent of business executives said their companies are looking to hire immediately, a drop of three percentage points from last quarter. Overall, 53 percent of respondents said their companies had the right amount of staffing, the same as last quarter. Projected headcount expansion has fallen to 0.5 percent for the coming year, down from a post-recession high of 2.1 percent in the fourth quarter of 2014.
  • Survey takers have dimmer view of their own companies’ prospects. Optimism about business executives’ own organizations fell below 50 percent for first time since end of 2012.  Some 44 percent now identify themselves as optimistic, down nine percentage points from a year ago.
  • Less robust expansion plans. Some 52 percent of business executives said they expected their companies to expand in the next 12 months, the lowest amount since the end of 2012. For the largest companies – those with more than $1 billion in annual revenue – expansion plans fell from 59 percent last quarter to 49 percent.
  •  Different takes from different places. Business executives in the West are most optimistic (55 percent) about their region, while those from the South are least optimistic (38 percent).
  • Volatile industry outlooks. Construction is expected to have the brightest prospects in the coming year (with 59 percent of executives expressing optimism this quarter), followed by technology (53 percent) and real estate (52 percent). Optimism about finance and insurance continued its slide, however, and the category is now one of the lowest ranked sectors at 41 percent. The least optimistic sector, retail trade, saw a turnaround in the past quarter and now stands at 39 percent, up 11 percentage points from the end of 2015.
  • Deflation is a rising concern. Some 22 percent of executives listed it as a potential issue, double the amount from last quarter. Inflation concerns, meanwhile, fell nine percentage points to 14 percent, quarter over quarter.
    To speak to a member of the Business and Industry Executive Committee, contact Mitchell Slepian at 212-596-6177 or

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