Business executives still report a cautious approach to hiring over next 12 months, AICPA survey finds
NEW YORK (March 8, 2012) – Business executives are growing increasingly confident about prospects for the U.S. economy and their own organizations over the next 12 months, according to the first quarter AICPA Economic Outlook Survey, which polls chief financial officers, controllers and other certified public accountants in executive and senior management accounting roles.
The CPA Outlook Index – a comprehensive gauge of executive sentiment within the survey -- rose five points to 69, a post-recession high that matches the index score from the first quarter a year ago. The index is a composite of nine, equally weighted survey measures set on a scale from 0 to 100, with 50 considered neutral and numbers above that signifying positive sentiment.
While each of the nine components increased over fourth quarter 2011 readings, the fastest-rising element of the index is optimism about the U.S. economy, which jumped from 40 points to 61. It had fallen to as low as 25 points in the third quarter of 2011. Still, while the component has gone up dramatically over the past two quarters, it continues to be the lowest-scoring measure in the index and remains below the level reached a year ago.
“Optimists now outnumber pessimists on the U.S. economy by an almost 2-to-1 margin, which is a striking change from six months ago,” said Carol Scott, AICPA vice president for business, industry and government. “While a substantial number of respondents remain neutral, we’re seeing a clear shift toward a more positive outlook for the coming year.”
Business executives also foresee better things for their own companies. Some 55 percent said they were optimistic or very optimistic about the outlook for their organizations over the next 12 months, compared to 45 percent last quarter.
“This is the second strong survey result in a row,” said Jim Morrison, chief financial officer of Teknor Apex Co. “We still have a long way to go to feel really good about the economy, but all the arrows are pointing up.”
Among other findings of the survey:
- Some 14 percent of survey takers said they are planning to add new staff immediately, a slight increase over last quarter. Almost one-in-five respondents said their company needs to hire more employees but are hesitating until the economy improves. Some 57 percent said they had the right amount of workers.
- The technology sector is expected to add the most jobs over the next 12 months. Healthcare providers such as hospitals and nursing homes are projected to add the least.
- Some 61 percent of respondents said they expected to expand their business at least a little over the next 12 months.
- Almost 57 percent of survey takers said they planned to increase their IT budget to some degree over the next 12 months.
- The top three challenges facing companies were identified as: 1) domestic economic conditions, 2) regulatory requirements or changes, 3) employee and benefit costs.
AICPA vice president Carol Scott and Jim Morrison, chief financial officer of Teknor Apex Co., are available for interviews on the survey results and what they mean for businesses in the coming months.
The first quarter AICPA Business and Industry Outlook Survey was conducted Feb. 15 to March 1 and included 1358 qualified responses from CPAs who hold leadership positions, such as chief financial officer or controller, in their companies. The overall margin of error is less than plus-or-minus 3 percentage points. A copy of the full report can be found on aicpa.org.