Inflation Returns as No. 1 Concern Among Business Executives, AICPA & CIMA Survey Finds

Business executives don’t have a strong sense of where the economy is headed, and their mixed-bag outlook reflects that, according to the fourth-quarter AICPA & 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.

Twenty-four percent of survey respondents expressed optimism about the outlook for the U.S. economy over the next 12 months, a drop of 5% from last quarter. That continues a volatile trend of advance and retreat in economic optimism over the past year, a sign of the uncertainty business executives feel about the path ahead.

Inflation returned as the top concern cited by business executives after falling to No. 2 last quarter, and only 27% dismiss the prospect of a recession next year. Yet profit and revenue growth expectations for the next 12 months were largely unchanged from last quarter, with the profit outlook rising a tick from 0.1% to 0.5% and revenue growth projections slipping a bit from 1.9% to 1.8%.

“We’re seeing some softening on the hiring front and IT spending, which are classic areas of belt-tightening in uncertain times,” said Tom Hood, the AICPA & CIMA’s executive vice president for business engagement and growth. “At the same time, business executives’ expectations for their own organization’s prospects over the next year are down just a bit from the third quarter and ahead of where they were a year ago. So, there’s a lot of mixed signals right now on the economy.”

Twelve percent of business executives said they had too many employees, up four percentage points from last quarter. Some 38% said they have too few employees, but the percentage who said they were hesitant to hire because of economic uncertainty increased from 14% to 16%.

The fourth-quarter AICPA & CIMA Economic Outlook Survey was conducted from Nov. 7-28, 2023, and included 316 qualified responses

Other key findings of the survey:

  • Expansion plans fell slightly from 50% to 48% this quarter.
  • Business executives are less optimistic about their own company’s prospects over the next 12 months (43% versus 45% last quarter), although they are still ahead of where they were a year ago (35%).
  • Some 28% of business executives said they expected their companies to raise prices by year end, down from 37% last quarter. Sixty-three percent said they expected no change, while 2% said they anticipated decreases.

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