With recession fears on the wane, business executives reported their highest level of optimism about the U.S. economy’s prospects since the third quarter of 2021, according to the first-quarter AICPA & CIMA Economic Outlook Survey.
The survey polled 275 CEOs, CFOs, controllers and other CPAs in U.S. companies who hold executive and senior management accounting roles.
Inflation still remains a top concern but the specter of recession has diminished substantially since last year. Only 19% of business executives said they expect a recession in 2024, down from 41% last quarter. Projections for key performance indicators over the next 12 months also saw a sharp uptick: Profit expectations for that period are now 1.4%, the highest level since early 2022, while revenue growth is expected to be 2.6%, up from 1.8% last quarter.
Some 43% of business executives said they were optimistic about the U.S. economy over the next 12 months, up from 24% last quarter. Sentiment had dropped to as low as 14% in the second quarter last year. Survey respondents’ view of their own organizations’ outlook also rose, with 49% expressing optimism compared to 43% last quarter.
“We saw across-the-board increases in sentiment in the survey this quarter,” said Tom Hood, AICPA & CIMA’s executive vice president for business engagement and growth. “In recent months, there’s been a disconnect between U.S. economic indicators – which have been largely positive on growth, unemployment and declining inflation – and the perception of how the economy is faring. This quarter looks like a bit of a reset.”
Other key findings:
- Business executives cite “availability of skilled personnel” as their No. 3 concern after inflation and employee and benefit costs.
- A slight majority (51%) of business executives say their companies plan to expand over the next 12 months, up slightly from 48% last quarter.
- According to 85% of survey respondents, their companies had not engaged in significant layoffs recently.
