Don't look now, but concerns about inflation and a potential recession are dwindling, which is causing business executives to grow guardedly less pessimistic about what lies ahead for the US economy’s prospects.
According to the third-quarter "AICPA & CIMA Economic Outlook Survey," only 29% of survey respondents expressed optimism about the outlook for the US economy over the next 12 months. While modest, that’s the highest level since the first quarter of 2022 and a jump from last quarter’s measure of 14%.
US business executives’ views of the global economy also improved somewhat, with 17% expressing optimism, up from 11% last quarter, according to the survey, which polls CEOs, CFOs, controllers and other certified public accountants in US companies with executive and senior management accounting roles.
The survey also showed that 16% of executives expected a recession by year-end, a dramatic drop from the 47% who expressed that sentiment last quarter. The percentage of those who believed the economy already is in recession also fell sharply, with 27% still expecting to see a one in 2024.
Inflation—the top business challenge identified within the survey since the end of 202—was supplanted this quarter by “availability of skilled personnel,” a reflection of the continued tightness in the labor market and executives’ perception of a lingering skills gap in the workforce.
Other key findings of the survey:
Expansion plans increased from 43% to 50%, and those who expect their businesses to contract fell from 46% to 24%.
12-month profit expectations swung from negative (-0.9%) to a narrow positive (0.1%) in the quarter. Revenue growth for the next 12 months is now projected to be 1.9%, up from 1.2% last quarter.
Business executives are more optimistic about their own company’s prospects over the next 12 months (45% vs. 35% last quarter).
Some 37 percent of business executives said they expected their companies to raise prices by year end. Fifty-one percent said they expected no change, while 4% said they anticipated decreases.
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 Labor’s August employment report, scheduled for release tomorrow, looks back on the previous month’s hiring trends.
To download the survey, CLICK HERE.
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