Business Executives See a Downshift in Key Performance Indicators Over the Next Year, AICPA Survey Finds

  • CFOs and senior-level CPAs take dimmer view of expansion and their
    own companies’ prospects
  • Outlook for U.S. economy holds steady after decline earlier this
  • Hiring plans brighten but skilled personnel remain scarce

NEW YORK–(BUSINESS WIRE)–Concerned about the outlook for both the U.S. and global economies,
business executives have revised expectations downward for a number of
categories that impact their companies, according to the second-quarter AICPA
Economic Outlook Survey
, which polls chief executive officers, chief
financial officers, controllers and other certified public accountants
in U.S. companies who hold executive and senior management accounting

Some 57 percent of survey takers expressed optimism about the U.S.
economy’s outlook over the next 12 months, the third straight quarter
it’s held at that level since dropping from 79 percent at the start of
2018. U.S. executives also continue to hold a dim view of the global
economy, with only 35 percent expressing optimism, up a single
percentage point from last quarter.

In recent quarters, business executives had kept a more upbeat view of
expansion prospects and their own companies’ outlook. That sentiment has
gradually eroded over the course of the year, however, and both
categories now stand at their lowest level since late 2016. The same
holds true for 12-month revenue and profit expectations, which slid this
quarter from 4.4 percent to 4.2 percent and 3.6 percent to 3.1 percent,

“While business executives’ expectations for their companies and the
perceived environment those companies will be operating in over the next
year have been tracking downwards, there’s been a slight disconnect
between these for the past few quarters,” said Ash Noah, CPA, CGMA,
managing director of CGMA learning, education and development for the
Association of International Certified Professional Accountants, the
global organization that includes the American Institute of CPAs (AICPA)
and the Chartered Institute of Management Accountants (CIMA). “In this
quarter, we’ve seen a bit of a reset and the indicators are more closely
aligned. With so much uncertainty over trade and other global issues,
companies are taking a more conservative stance on their potential

Availability of skilled personnel remains the top challenge for
businesses, a position it has occupied since the third quarter of 2017.
Two other staffing-related issues are among the top five challenges
cited by survey takers this quarter: employee and benefit costs (No. 2)
and staff turnover (No. 5).

With a tight labor market, business executives forecast a 2.7 percent
increase in salary and benefit costs over the next twelve months, a 0.1
percent increase over last quarter’s forecast. Asked for more specifics
in a separate question, some 86 percent of respondents said they
expected to raise salary and wages in the next 12 months, with most (64
percent) saying they expected those increases to fall between three and
five percent. Only eight percent said they didn’t expect to raise
salaries and wages at all. These numbers track closely with results from
the last time the question was asked at the end of 2018.

The AICPA survey is a forward-looking indicator that tracks hiring and
business-related expectations for the next 12 months. In comparison, the
U.S. Department of Labor’s May employment report, scheduled for release
tomorrow, looks back on the previous month’s hiring trends.

The CPA Outlook Index—a comprehensive gauge of executive sentiment
within the AICPA survey— fell a single point to 75 from last quarter.
The index is a composite of nine, equally weighted survey measures set
on a scale of 0 to 100, with 50 considered neutral and greater numbers
signifying positive sentiment.

Other key findings of the survey:

  • The percentage of U.S. executives who expressed optimism about their
    own company’s prospects over the next 12 months fell from 65 percent
    to 62 percent, quarter over quarter.
  • Survey respondents who said they expect their organizations to expand
    in the coming year also fell three percentage points to 63 percent.
  • The number of business executives who said their companies have too
    few employees and are ready to hire immediately edged up slightly in
    the quarter from 26 percent to 28 percent. Those who want to hire but
    are hesitant because of uncertainty also edged up a tick from 15 to 16
    percent. This hesitancy to hire was particularly pronounced in the
    largest companies (those with over $1 billion in annual revenue), with
    one-in-four reporting such qualms. That’s much higher than other
    company segments.
  • Inflation concerns slipped five percentage spots to 29 percent in the
    quarter and have dropped from 47 percent a year ago.
  • Construction and health care providers were bright spots for positive
    sector outlooks in the quarter, while retail trade and manufacturing
    showed sharp drops in optimism.


The second-quarter AICPA Business and Industry Economic Outlook Survey
was conducted from May 7-28 and included 785 qualified responses from
CPAs who hold leadership positions, such as chief financial officer or
controller, in their companies. The overall margin of error is less than
3 percentage points. A copy of the report
can be found on

About the American Institute of CPAs

The American Institute of CPAs (AICPA) is the world’s largest member
association representing the CPA profession, with more than 429,000
members in the United States and worldwide, and a history of serving the
public interest since 1887. AICPA members represent many areas of
practice, including business and industry, public practice, government,
education and consulting. The AICPA sets ethical standards for its
members and U.S. auditing standards for private companies, nonprofit
organizations, federal, state and local governments. It develops and
grades the Uniform CPA Examination, offers specialized credentials,
builds the pipeline of future talent and drives professional competency
development to advance the vitality, relevance and quality of the

About the Association of International Certified Professional

The Association of International Certified Professional Accountants (the
Association) is the most influential body of professional accountants,
combining the strengths of the American Institute of CPAs (AICPA) and
The Chartered Institute of Management Accountants (CIMA) to power
opportunity, trust and prosperity for people, businesses and economies
worldwide. It represents 657,000 members and students across 179
countries and territories in public and management accounting and
advocates for the public interest and business sustainability on current
and emerging issues. With broad reach, rigor and resources, the
Association advances the reputation, employability and quality of CPAs,
CGMAs and accounting and finance professionals globally.


Jeff May


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