Ronald Reagan frequently used the term “cautiously optimistic” when asked about the economy and other topics. According to the third quarter the American Institute of Certified Public Accountants (AICPA) Economic Outlook Survey, business executives continue to raise their expectations for hiring in the coming year.
The is the largest association for CPAs, polls CEOs, CFOs,, controllers and CPAs at U.S. companies who hold executive and senior management accounting roles. Its quarterly survey is a forward-looking indicator of hiring expectations over the next 12 months. The most recent one found that 15 percent of respondents say they have too few employees and are planning to hire in the next 12 months. This is an increase from just 9 percent a year ago.
Most elements of the CPA Outlook Index – a comprehensive gauge of executive sentiment within the survey – rose modestly or were unchanged. A note of caution: U.S. economic optimism fell four points, in part due to concerns about health-care reform and political gridlock. Organization optimism – how executives feel about their own companies – slid a point after having increased steadily in each of the previous three quarters. However, each component of the index is higher now than a year ago, with U.S. economic optimism up 21 points year-over-year.
Some other key findings:
- Key Performance Indicators – Profit and revenue expectations are tracking upwards, but at a modest pace.
- Hiring – More than half (53%) of businesses say their companies have the right number of employees. Larger companies (those with $1 billion+ in annual revenue) are more likely to say they have too few employees.
- Industries – The construction, technology, and professional, technical and scientific services sectors are expected to see the biggest job growth.
While there has been improvement in the economy, the business community has concerns. Nearly one in five CPA Outlook Index respondents say they have too few employees, but still are reluctant to bring on new staff. Thus, we remain cautiously optimistic.