Ongoing labor shortages and growing inflation concerns are driving down optimism about the U.S. economy, according to the latest AICPA Economic Outlook Survey. The fourth quarter edition of the poll surveyed 628 CPAs who hold leadership positions during the period of Oct. 26 to Nov. 17, with just 41% of respondents expressing optimism about the U.S. economy over the coming 12 months, down from 51% three months ago and 70% in the second quarter.
Inflation is now the top concern cited by survey respondents, followed closely by the limited availability of skilled personnel. The tight labor market is a factor in an anticipated increase in salary and benefit costs, which are expected to rise 4.3% over the next 12 months, up from the 3.7% projected rate last quarter. When it comes to filling those open positions, 39% of survey respondents said their organizations were looking to hire immediately, while another 15% said they had too few employees but are hesitant to hire. Forty-four percent said they saw no improvement in their pool of potential job candidates after the end of extended federal unemployment benefits in September, while about a third (32%) said they saw at least a slight improvement.
“Inflation, hiring difficulties and the pandemic are all factors in the diminished economic outlook,” says Ash Noah, AICPA managing director of CGMA learning, education and development. “Our survey was conducted before the potential impact of the pandemic’s omicron variant emerged, but the ongoing repercussions of COVID-19 are unmistakable. Almost a third of business executives said they were keeping safety protocols in place longer than expected, and another 15% said they continue to have delayed timetables for some reopening plans.”
Among the other key findings in this edition of the survey:
- Fifty-three percent of business executives said the most difficult positions for their organizations to fill are entry-level jobs, while another 28% said their difficulties were across the board.
- Eighteen percent of respondents said their organizations are still not ramping up business travel to the degree they had expected at this point.
- Optimism about the global economy slid to 33%, down five percentage points from last quarter.
- Business expansion plans remained flat, quarter over quarter.