Business executives who are CPAs are feeling more optimistic about the U.S. economy than they’ve felt in the past three years.
Approximately 70% of business executives expressed optimism about the U.S. economy over the next 12 months, up from 47% in the first quarter of the year, according to a
The economy seems to be on the rebound this year thanks in part to the wide availability of COVID-19 vaccines. The AICPA Economic Outlook Survey indicated some signs of concern, however, with “availability of skilled personnel” cited as the top challenge for businesses as job recruitment increases. Two-thirds of business executives also voiced concerns about inflation, an increase from 44% in the second quarter.
“What we’re seeing is a broad expectation that things will really open up in the second half of the year,” said Ash Noah, vice president and managing director of CGMA learning, education and development at the Association of International Certified Professional Accountants, in a statement. “Many issues remain, of course. Supply chains are still straining to meet demand in a number of sectors. The global response to the pandemic still contains many uncertainties, which impacts the United States. But we are clearly seeing growing confidence on the part of business executives that the worst is behind us.”
Most of the survey results were positive, with business executives’ optimism about their own organization’s prospects over the next 12 months increasing from 58% to 76% since last quarter. In addition, 69% of the executives polled said their companies plan to expand in the next 12 months, up from 58% in the first quarter.
Profits are anticipated to grow 4% in the next 12 months, more than doubling the 1.9% forecast in the first quarter. Revenues are expected to increase 5%, up from 3% in the previous quarterly survey. Both projections are at their highest level since 2018.
Hiring prospects have also improved, with 33% of executives saying their companies plan to fill positions immediately, up from 19% in the first quarter. An additional 14% said they have too few employees but are hesitant to hire. The percentage of executives who said their companies had too many employees declined from 7 to 4%, quarter over quarter.
About 50% of business executives expressed optimism about the global economy, up from 37% in the first quarter. After “availability of skilled personnel,” the top challenges cited by businesses are “materials/supplies/equipment costs” — No. 6 last quarter — and “domestic political leadership.”
Supply input prices are expected to increase 4.4% over the next 12 months, up from a forecast of 3.1% in the previous survey. On the other hand, the prices that executives expect their companies to charge are anticipated to increase 2.7% in that timeframe, up from 1.8%.
Sectors seeing increased hiring compared to last quarter include pharmaceuticals, medical devices, manufacturing, hospitality and entertainment. The sectors where hiring appears to be slowing down slightly include banking and real estate.
