Pessimism on U.S. Economy Deepens in Latest AICPA Survey of Business Executives

Fiscal Cliff and Worries on Future Sales and Profitability Cloud Hiring Plans

December 6, 2012

Contacts: Mitchell Slepian, 212-596-6177,; Gil Nielsen, 212-596-6008,

NEW YORK (Dec. 6, 2012) –
Business executives hold their dimmest view of prospects for the U.S. economy since the waning days of 2011, according to the fourth quarter American Institute of CPAs' Economic Outlook Survey, which polls chief executive officers, chief financial officers, controllers and other certified public accountants in U.S. companies who hold executive and senior management accounting roles. Pessimism has deepened steadily over the past three quarters, but this time there were no offsetting bright spots – every major measure of economic expectations in the survey fell, quarter over quarter and year over year. 

The CPA Outlook Index--a comprehensive gauge of executive sentiment within the survey--fell four points to 59 for the quarter. The index had matched a post-recession high of 69 at the start of this year, but has since sagged.


The index is a composite of nine, equally weighted survey measures set on a scale from 0 to 100, with 50 considered neutral and greater numbers signifying positive sentiment. This quarter, the biggest erosion was in profit expectations, which fell six points, followed by a drop of five points for both U.S. economic outlook and business expansion plans.

“While most executives are still projecting modest growth for their businesses, the trends for hiring plans suggest retrenchment rather than recovery,” said Arleen R. Thomas, CPA, CGMA, the AICPA’s Senior Vice President, Management Accounting & Global Markets. “Only 8 percent of firms have immediate plans to hire, and the number of businesses that say they have too many workers is on an upswing.”

Views on the U.S. economy became more sharply etched in the quarter. Some 21 percent of survey takers said they were optimistic about the outlook for the U.S. economy, roughly the same percentage as last quarter. But the number of pessimists increased from 40 percent to 49 percent, with fewer respondents identifying themselves as “neutral.”

In written comments, business executives most often cited the federal deficit, government debt and ‘fiscal cliff’ – a potential combination of expiring tax cuts and deep, mandated spending cuts that could blunt economic growth – as major concerns on the domestic front. They also took a less optimistic view of their own companies’ prospects going forward than in the previous quarter.

Other findings of the survey include:

  • Key Performance Indicators – Expectations for revenue, profits and headcount growth are at their lowest levels since the third quarter of 2010. 
  • Spending Plans – Expectations for investment in information technology, training and capital spending are all below levels from a year ago.
  • Top Challenges – The top 3 items remain unchanged from last quarter: 1) Domestic economic conditions, 2) Regulatory requirements/changes and 3) Domestic political leadership.

Arleen Thomas and Jim Morrison, CPA, CGMA, chief financial officer of Teknor Apex Co. and chair of the AICPA’s Business & Industry Executive Committee are available for interviews on the survey results and what they mean for businesses in the coming months.


The fourth quarter AICPA Business and Industry Outlook Survey was conducted from Nov. 8-29, 2012, and included 1,668 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