Adrian JohnsonTLDR:
– CPA business executives are feeling less optimistic about the U.S. economy in Q2 compared to Q1.
– Concerns include ongoing inflation, interest rates, election-year uncertainty, and geopolitical issues.
Despite feeling extremely optimistic about the U.S. economy in the first quarter of 2024, CPA business decision makers have become less optimistic in the second quarter. This shift in sentiment is attributed to concerns about ongoing inflation, interest rates, and election-year uncertainty, according to the AICPA & CIMA Economic Outlook Survey. The survey, which includes responses from 315 AICPA members holding executive positions in business and industry, revealed that only 35% of CPA business executives are optimistic about the economy’s prospects over the next 12 months, down from 43% in the previous quarter.
Key drivers of this more pessimistic outlook include continuing geopolitical issues, election-year uncertainty, and concerns about interest rates and inflation. While some optimists are hopeful for an interest rate reduction and economic resiliency, pessimists are wary of the current conditions. Tom Hood, AICPA & CIMA’s executive vice president for business engagement and growth, commented on the conflicting signals present in the survey results, noting a mix of confusing or conflicting statistics affecting the overall economic outlook.
In Q2, election-year uncertainty caused “domestic political leadership” to become the fourth concern on the list of CPA business executives’ top worries. The top three concerns remain inflation, employee and benefit costs, and the availability of skilled personnel. The survey also highlighted a possible softening in hiring outlook, with some executives hesitant to recruit due to uncertainty. Despite these challenges, profit expectations for the next 12 months have increased slightly, and revenue growth projections are more positive compared to a year ago.
Overall, the AICPA & CIMA Economic Outlook Survey provides valuable insights into the sentiments and expectations of CPA business executives, offering a forward-looking indicator of hiring and business-related trends. As the U.S. economy continues to navigate through various challenges, it is essential for businesses to stay informed and adaptable to changing conditions.
