CPAs Weigh in on Economy: Outlook Not So Good

Pessimists outweighed optimists by a two-to-one margin among CPAs serving as C-suite executives, according to the American Institute of CPAs (AICPA) and the University of North Carolina’s Kenan-Flagler Business School’s latest Quarterly Economic Outlook Survey. Here's an overview:

• Only 21 percent of the survey respondents expressed optimism about economic recovery, a sharp decrease from 40 percent who were optimistic in May and the lowest level since April 2009. Forty percent were pessimistic about the economy, up from 25 percent in the last quarter.
• Measures of optimism versus pessimism registered a combined 34 percentage-point swing toward a negative outlook, reversing the 28 percentage-point shift toward optimism recorded in the prior quarter when optimists outnumbered pessimists for the first time in two years.
• Three in four, or 78 percent of respondents believe U.S. business conditions will not return to pre-recession levels until 2012 or later. Seventeen percent said conditions would return to pre-recession levels in 2011, and less than one percent said activity would rebound this year.
• Twenty-four percent expressed more confidence about the prospects for their own organizations, a decrease from 40 percent who had more confidence in May. CPAs who are pessimistic about their own organizations rose slightly to 21 percent from 20 percent in the prior quarter.

Employment
Employment remains a top issue, which the survey touches on, too. As U.S. unemployment holds steady at 9.5 percent, 55 percent of survey respondents do not anticipate their organizations’ employment levels returning to pre-recession levels in the next year, compared with seven percent who anticipate staffing levels returning to normal in the next year. Less than one in ten, 9 percent, reported that their organizations were planning to hire in the immediate future.

Meanwhile, the Robert Half Global Financial Employment Monitor, released around the same time as the AICPA survey, expands on hiring trends.

According to the Robert Half survey, the most active hiring is expected to take place at the entry and staff levels. Employers reported difficulty finding skilled candidates for specific functional areas. Respondents cited particular challenges filling finance, accounting and operational support positions. Employers are a bit more confident about their ability to retain top talent, however. Forty-five percent of respondents said they are worried about their ability to keep top performers, down from 53 percent in 2009.

Growth
The Robert Half survey shows 83 percent of financial leaders said they were either very or somewhat confident in their companies' growth prospects for the next year. The AICPA survey results reveal only 54 percent expect their business to expand in the next 12 months.

The AICPA study focuses on CPAs' economic outlook, and included 1583 qualified respondents. The Robert Half study focuses on financial leaders' perspectives on hiring difficulties, retention concerns and other staffing-related issues, and included more than 6,300 qualified responses from 19 countries.