Business Executives’ Optimism about U.S. Economy Drops for Second Straight Quarter, AICPA Survey Finds

Companies with Open Positions Show More Reluctance to Hire

September 3, 2015

NEW YORK (Sept. 3, 2015) – The percentage of business executives who are optimistic about the U.S. economy going forward dipped below 50 percent for the first time since early 2014, according to the third quarter AICPA 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. Hiring plans also continued to soften from late last year.

Some 48 percent of respondents expressed optimism about the U.S. economy over the next 12 months, down from 52 percent last quarter and well below the first quarter mark of 68 percent. The impact of a global economic slowdown and domestic regulatory concerns were among the top reasons cited for the slide.

Arleen Thomas"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.”

There was a modest uptick (+1 percentage point) in optimism about prospects for survey takers’ own businesses, which rose to 59 percent after successive declines over the past two quarters. That optimism is reflected in part through slightly higher expectations for growth in profit (2.6 percent, +0.2 percent over last quarter) and revenue (3.3 percent, +0.1 percent over last quarter) over the next 12 months.

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.

The AICPA survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months. As a point of comparison, the U.S. Department of Labor’s August employment report, scheduled to be released tomorrow, looks back on the previous month’s hiring trends.

The CPA Outlook Index—a comprehensive gauge of executive sentiment within the AICPA survey— fell one point in the 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.

Other key findings of the survey:

  • 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.
  • 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.
  • 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.

The third quarter AICPA Business and Industry Economic Outlook Survey was conducted Aug. 4-24, 2015, and included 1,440 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 3 percentage points. A copy of the report can be found on