CPA execs uncertain on outlook for 2024

Business leaders who are also CPAs are unsure about the direction of the U.S. economy next year, according to a new survey.

The AICPA & CIMA Economic Outlook Survey for the fourth quarter polled a group of 316 CEOs, CFOs, controllers and other CPAs at U.S. companies who hold executive and senior management accounting roles, and found that nearly a quarter of them (24%) expressed optimism about the outlook for the U.S. economy over the next 12 months, but that represented a decline of 5% from the third quarter.

That measure of economic optimism has gone back and forth this past year and shows the uncertainty felt among business executives about the future.

Worries about inflation returned as the top concern after dropping to second place in the previous quarter, with only 27% of the respondents dismissing the likelihood of a recession in 2024. Nevertheless, profit and revenue growth expectations for next year were mostly unchanged from the third quarter, with the profit outlook ticking up from 0.1% to 0.5% and revenue growth projections slipping from 1.9% to 1.8%.

"We're seeing some softening on the hiring front and IT spending, which are classic areas of belt-tightening in uncertain times," said Tom Hood, the AICPA & CIMA's executive vice president for business engagement and growth, in a statement Thursday. "At the same time, business executives' expectations for their own organization's prospects over the next year are down just a bit from the third quarter and ahead of where they were a year ago. So, there's a lot of mixed signals right now on the economy."

Some companies seem to be scaling back their hiring plans, although the latest jobs report from the Labor Department indicated hiring remained robust in November, despite some cuts in accounting, tax, bookkeeping and payroll jobs. The AICPA & CIMA survey found 12% of the business executives polled indicated their companies already had too many employees, up four percentage points from the previous quarter. Over two-thirds of the respondents (38%) said their organizations have too few employees, but the percentage who said they were hesitant to hire because of economic uncertainty grew from 14% to 16%.

Expansion plans for companies fell slightly from 50% to 48% of the respondents in the fourth quarter. CPA business executives appear to be less optimistic about their own company's prospects over the next 12 months (43% of respondents in Q4 compared to 45% in Q3), but they're still ahead of where they were a year ago (at 35%).

Over one-fourth (28%) of the CPA business executives polled anticipate their companies will raise prices by year end, down from 37% last quarter, perhaps a sign of inflation easing. Nearly two-thirds (63%) of the respondents expect no change in prices, but only 2% anticipate price decreases.