A post-election boost in business executives’ optimism about the US economy has moderated, declining from a more than three-year high of 67% last quarter to 47% this quarter, according to the AICPA & CIMA Economic Outlook Survey.
The shift reflects growing concerns about inflation and tariffs, according to the survey, which polls CEOs, chief financial officers, controllers and other certified public accountants in US companies who hold executive and senior management accounting roles.
The survey was conducted before the Trump Administration imposed tariffs this week on Canada, Mexico and China, but respondents were asked their general views about unspecified tariffs if they were put in place. Fifty-nine percent indicated that tariffs would have a negative effect on their businesses, while 85% said uncertainty surrounding the subject had influenced their business planning to some degree – nearly one in five (18%) described that impact as significant.
Inflation remained the top concern for business executives, followed by issues related to staffing – employee and benefit costs (number two), availability of skilled personnel (number three), and staff turnover (number 10). Domestic political leadership, which was absent from last quarter’s top 10 concerns, reemerged at number six.
“There are a lot of warning signs right now for business executives, particularly around inflation, payroll costs and consumer confidence, with tariffs adding another layer of uncertainty,” says Tom Hood, AICPA & CIMA’s executive vice-president for business engagement and growth. “That said, it’s important to recognise that economic optimism remains higher than at any point since mid-2021, aside from last quarter’s notable increase. Additionally, expansion plans have held steady from the previous quarter.”
The AICPA survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months. In comparison, the US Department of Labour’s February employment report, scheduled for release tomorrow, looks back on the previous month’s hiring trends.
Other key findings of the survey include:
- Business executives who said they were optimistic about their own organisation’s outlook over the next 12 months fell from 53% to 50%, quarter over quarter.
- Revenue and profit expectations for the next 12 months both eased from last quarter’s big increases. Revenue growth is now expected to be 3%, down from a 3,3% projection last quarter. Profit projections are now 2%, down from 2,2% last quarter.
- Survey takers who expect their businesses to expand over the next 12 months remained unchanged at 57%.
- Some 39% of business executives said they had too few employees, a 1% increase from last quarter. One in five said they were ready to hire immediately, unchanged from last quarter.