Outlook for U.S. Economic Grew Dimmer Before Russian Invasion; Concerns Now Heightened

Worries about inflation, supply chain slowdowns and not enough workers dampened business executives’ view of the U.S. economy, according to the first-quarter AICPA Economic Outlook Survey.

The survey, however, closed Feb. 23, the day before Russia invaded Ukraine and economic sanctions were imposed. Since Russia is one of the world’s biggest commodity exporters, higher commodity prices are a big concern, Reuters reports. U.S. crude prices topped $115 a barrel this week – their highest level since 2008. At the same time, concerns that the Fed will sharply increase interest rates has lessened.

“With Russia’s invasion of Ukraine and the resulting economic and political turmoil, we expect additional stresses throughout the global economy,” says Ash Noah, the AICPA’s vice president and managing director of Chartered Global Management Accountant (CGMA) learning, education and development. “We don’t know yet the full impact on energy and commodity prices and general trade, but the levels of risk and uncertainty have increased for finance managers.”

Prior to these events unfolding, AICPA survey respondents showed less enthusiasm for the U.S. economy. Only 36% of business executives expressed optimism over the next 12 months, down from 41% last quarter. The outlook for the global economy also fell, with 30% of business executives expressing optimism, also down from the previous quarter.

This survey drew 461 responses from CEOs, CFOs, controllers and other CPAs in U.S. companies in leadership roles.

Inflation was the top concern for survey respondents for the second straight quarter, with 42% saying labor costs represented the most significant risk in this area. Availability of skilled personnel remains the second biggest challenge for U.S. companies. On hiring, 45% of business executives said their organizations were looking to fill roles immediately, while another 12% said they had too few employees but are hesitant to hire. Among other key findings from the survey:

  • 58% of business executives hold a positive outlook for their own organization’s prospects, the same as last quarter.
  • Profit expectations fell to an anticipated growth rate of 1.6% over the next 12 months, a drop from 2.1% last quarter, their lowest level since the end of 2020.
  • Revenue projections also fell. Business executives now expect a 12-month growth rate of 4.5%, which is below an anticipated 4.7% last quarter.



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