Sixty-four percent of chief executive officers, chief financial officers, controllers and other senior-level CPAs in U.S. companies polled by the AICPA in the first quarter said the outcome of the 2016 presidential election is a consideration or factor in their company’s business planning, budgeting or forecasting for the next fiscal year. Business executives ranked the election fourth in impact in this regard, behind potential changes in general economic conditions, the industry-specific outlook for survey takers’ businesses, and interest rates and borrowing costs. The election was tied in perceived impact with potential ramifications of the strong dollar, and ahead of volatility in equity markets.
“Company executives are clearly monitoring the potential business impact of the presidential election,” said Arleen R. Thomas, CPA, CGMA, the AICPA’s senior vice president for management accounting and global markets. “But overall economic conditions and challenges for their particular industries are weighing more heavily in their calculations right now, and that’s likely why we’re seeing little election-cycle impact on such key categories as hiring or capital spending.”
Eighty-one percent of survey takers say the election is either not a factor in staffing decisions (56 percent) or that they plan to continue hiring at their current pace (25 percent). Another 13 percent said they will defer hiring until after the election, while five percent said they will reduce hiring before the election. One percent said they planned to increase hiring before the election.
For capital spending and business expansion, 80 percent said the election either will not be a factor (53 percent) or that they will continue spending at the current pace (27 percent). Another 10 percent said they will defer capital expenditures until after the election, while eight percent said they will reduce it prior to the election. Two percent said they will increase capital spending before the election.
The election impact questions were included in the first quarter AICPA Economic Outlook Survey, general results of which were released earlier this month. The overall survey was conducted Feb. 9-24, 2016, and included 540 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 full report can be found on aicpa.org.