After expressing unfettered optimism about the state of the U.S. economy just three months ago, business executives now seeing labor shortages and potential inflation are a lot less giddy, according to the latest AICPA Economic Outlook Survey. The third quarter edition of the poll surveyed 669 CPAs who hold leadership positions during the period of Aug. 3 to Aug. 23, with 51% of respondents expressing optimism about the U.S. economy over the coming 12 months, down from 70% in the previous quarter.
More than three-fourths (77%) of survey participants are now concerned about inflation – particularly regarding raw material and labor costs. Meanwhile, the tight labor market continues to loom over many businesses, with 40% of respondents saying their companies have too few employees and are looking to hire immediately, while another 14% say they also have too few employees but are hesitant to hire. Concern about the impact of the ongoing COVID-19 resurgence is also dampening enthusiasm.
“There is a significant downward shift – 51% versus 70% last quarter – in the percentage of business executives who feel optimistic about the U.S. economy,” says Ash Noah, AICPA managing director of CGMA learning, education and development. “This quarter’s score, however, compares favorably to a year ago when it stood at 24%. Business executives are expressing increased concern about inflation, staffing and the potential for COVID-19 variant surges, and this continued flux and uncertainty helps explain the current pullback in optimism on the economy.”
Among the other key findings in this edition of the survey:
- To improve recruitment and retention, 64% of respondents said their companies were offering higher wages or salaries, while 46% said they were offering more flexible work arrangements.
- Sixty-five percent of survey participants expressed optimism about prospects for their own companies over the next 12 months, down from 76% last quarter.
- Fewer companies say they expect to expand over the next 12 months – 64% versus 69% last quarter.