Virginia CPAs see more pain ahead nationally, but are slightly more bullish on the Commonwealth’s prospects for economic recovery, according to the results of the Virginia Society of CPAs (VSCPA) 2010 Virginia Economic Outlook survey.
A majority of the respondents identified their outlook on the Virginia economy as “balanced” or “somewhat optimistic” for their company, the accounting industry and the Commonwealth as a whole. CPAs were less optimistic regarding the overall Virginia economy than on their firm and the industry, with a plurality of 37 percent of respondents describing their outlook as “balanced.”
The good news is that the majority (80 percent) of respondents rated Virginia’s overall business climate as “good” or “excellent” compared to neighboring states, while 42 percent predicted that capital investments in Virginia would increase in 2011. CPAs cite location as the top factor in helping Virginia retain or attract new business to Virginia.
When asked to select the top financial problem experienced by Virginia businesses, “health care costs” and “lending environment / sources of capital” took the top two spots. In fact, more than half (55 percent) said Virginia small businesses did not currently have access to adequate credit to sustain and grow their businesses.
Nationally, 42 percent of respondents rated their outlook on the economy as “somewhat pessimistic” for 2011. Nearly 90 percent said that the economic downturn would last at least one year longer, with 32 percent predicting more than two years before recovery.
How are CPAs coping with the current economy? Many indicated that their companies would make an effort to control expenses.
More than 40 percent of respondents said that their firm would reduce travel in 2011, while 31 percent said their organization would reduce employee benefits and 29 percent anticipated a cutback in capital spending.
Finally, despite the challenging economy, more than 85 percent of respondents said their firm anticipated growing or maintaining revenue in 2011.
The survey was sent to 4,750 members of the VSCPA in December, yielding a 5.5 percent response rate. Slightly more than half of respondents work in public accounting, with the other half working in business and industry and other sectors. Forty-four percent represented businesses with more than 50 employees; 40 percent represented businesses with between two and 49 employees; and 16 percent represented sole proprietorships.