The CPA Outlook Index - a comprehensive gauge of executive sentiment – fell one point third quarter to 71, the third consecutive drop from a post-recession high of 78 in the fourth quarter of 2014. 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.
“Because of economic uncertainty, we’re seeing a more cautious approach to hiring at most companies, particularly the largest ones,” said Arleen R. Thomas, CPA, CGMA, the AICPA’s senior vice president of management accounting and global markets. “If there’s a silver lining, 61 percent of executives who work at companies with annual revenue of less than $10 million said they expect their business to expand in the coming year, up from 47 percent last quarter.”
Some 52 percent of business executives say their company currently has the right staffing. Another 18 percent said they are looking to hire immediately, down from 21 percent last quarter. The biggest shift, however, came in companies that need more employees but are hesitant to hire – one-in-five survey takers say their organizations now fall in this category, up six percentage points from last quarter.
Overall, expected headcount growth for the next 12 months fell 0.2 percentage points in the past quarter to 1.3 percent. It had been as high as 2.1 percent in the fourth quarter last year.
Other key findings of the survey:
1. Despite the softening employment picture, “availability of skilled personnel” was identified as a Top 3 challenge for businesses for the first time since the fourth quarter last year.
2. The percentage of companies expecting their business to expand dropped one percentage point over the past quarter to 60 percent. But only three percent of companies expect their business to contract significantly, in line with last quarter and a substantial improvement over the 19 percent who answered that way in the first quarter.
3. Growth in IT investments led spending categories. Anticipated spending on training, meanwhile, fell to an expected 1.4 percent growth rate from 1.8 percent in the second quarter.
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