Outlooks on U.S. economy remains at 11-year low, survey says

Accounting

U.S. business executives’ expectations for profit and revenue growth plummeted again for next year, found the third-quarter AICPA and CIMA Economic Outlook Survey

The survey polls CEOS, CFOS, controllers and other CPAs in U.S. companies who hold executive and senior management accounting roles. This negative outlook on the  U.S. economy takes root in concerns about the consequences of inflation, the Russo-Ukrainian war and the economic slowdown in China. Overall, only 18% of business executives were optimistic for the next 12 months.  

“It’s concerning that business executives’ views of their own company’s prospects are eroding,” said Ash Noah, vice president and managing director of learning, education and development for AICPA & CIMA in a statement. Only 41% expressed optimism about their organization’s outlook this quarter, down from 47%. That’s a reflection of the pressure we’re seeing on profit and revenue projections.” 

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Step by step to the top, concept business progress

photographer: Dusanka Visnjican/Cherries – Fotolia

AICPA and CIMA, which together form the Association of International Certified Professional Accountants, found that this percentage was the same as last quarter, when it hit an 11-year low ratio. Since 2021, survey respondents’ views on the economy have declined each quarter, and the rate of positive outlook for the global economy over the last 12 months fell to 9% for U.S. executives. 

Survey respondents now expect zero profit growth this year, and revenue projections also plummeted quarter over quarter, from an expected 3.4% growth rate  to 2.6%. This is the lowest these key performance indicators have been since 2020, when the pandemic forced several companies to interrupt their market flow. 

“We’re still seeing residual stresses on supply chains from the pandemic and that’s now been coupled with the impact of sanctions and business wind-downs involving Russia,” said AICPA executive vice president of business engagement and growth Tom Hood in a statement last quarter. “Those global dislocations, a volatile pricing and cost environment, and the continuing impact of workplace shifts such as the Great Resignation are putting a lot of pressure on businesses and their finance teams.”

On hiring, 34% of business executives said they were looking for new candidates, while 19% said they were hesitant to hire, despite a reported staff shortage. The survey also found that fewer businesses were planning to expand, but the number of companies expecting to contract rose from 14% to 25% since last quarter.

For the fourth quarter in a row, inflation imposed itself as the top concern of business executives, while other top two challenges remained the same as last quarter:  “materials/supplies/equipment costs” and “availability of skilled personnel.” Notably, the top 10 gained a new category of challenges, the first in some time, with “stagnant/declining markets.”

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