Disappointingly, I snoozed through the alarm I set for 6:59 AM and therefore I completely missed the release of this information I have been waiting anxiously for since they told me to start waiting anxiously for it on Monday. BUT HERE IT IS, the AICPA Economic Outlook Survey:
NEW YORK (Dec. 5, 2013) – Business executives remain optimistic about their companies’ prospects for the coming year, but that sentiment is offset by deeper pessimism about the U.S. economy. This may have implications for hiring plans, according to the fourth quarter AICPA Economic Outlook Survey, which polls chief executive officers, chief financial officers, controllers and other certified public accountants in U.S. companies who hold executive and senior management accounting roles.
Executives in the survey typically hold a far more positive outlook for their own organization than for the U.S. economy as a whole, but the two categories usually ebb and flow in the same direction. This quarter, however, the outlook for individual companies is up slightly (57 percent positive, compared to 55 percent last quarter), while optimism about the U.S. economy is falling (38 percent positive, down from 44 percent a quarter ago).
That split view is evident in hiring plans, which appear to be softening after a lift last quarter. Business expansion expectations are virtually identical to last quarter, with 62 percent of executives saying they expect to grow at least a little in the coming year. There is a slight drop, however, in the percentage of respondents who said they are looking to hire immediately (13 percent, down from 15 percent last quarter), and headcount increase projections fell a tick from 1.3 percent to 1.2 percent in the past quarter.
Alright, well that's not so bad. Let's look a little deeper:
The American Institute of CPAs survey is a forward-looking indicator that tracks hiring expectations over the next 12 months. As a point of comparison, the U.S. Department of Labor’s November employment report, scheduled to be released tomorrow, looks back on the previous month’s hiring trends.
The CPA Outlook Index—a comprehensive gauge of executive sentiment within the AICPA survey— remains unchanged from the past two quarters at 69 points. The index is a composite of nine, equally weighted survey measures set on a scale of 0 to 100, with 50 considered neutral and greater numbers signifying positive sentiment.
The U.S. Economic Optimism component of the index is actually up more than any other category, year over year (plus 20 points). But it has been falling since midyear, fueled by concerns about regulation, political gridlock and employment, among other issues.
“There is a lot of good news in these survey results about business executives’ growing confidence in conditions, from profit expectations to plans for investment in training and technology,” said Arleen R. Thomas, CPA, CGMA, AICPA’s senior vice president of management accounting and global markets. “But it’s clear that uncertainty on the economy continues to play a major factor in hiring plans.”
Other findings of the survey include:
- Of those respondents who said they planned to hire soon, 72 percent said they would primarily look for full-time workers. Another 24 percent said they would hire a mix of full-time and part-time employees.
- Technology reclaimed its spot as the most optimistic sector. It also continues to lead the pack in anticipated headcount growth at 3.6 percent, an increase over last quarter’s 2.6 percent growth projection for the coming year.
- Optimism among retail respondents took a dramatic drop from 64 percent to 52 percent, quarter over quarter. Headcount for the sector is expected to increase 1.3 percent in the coming year, down from a projection of 1.8 percent last quarter.
- Profit and revenue expectations continue to show improvement.
- IT spending is the top category for projected spending growth (2.9 percent) over the next 12 months
- The top three business challenges are the same as last quarter, although the second and third items swapped places since last quarter: 1) Regulatory requirements and changes, 2) employee and benefits costs, and 3) domestic economic conditions.
If you're dying of curiosity, the fourth quarter AICPA Business and Industry Outlook Survey was conducted Nov. 5-24, 2013, and included 1,118 qualified responses from CPAs who hold leadership positions, such as chief financial officer or controller, in their companies. The overall margin of error is less than plus-or-minus 3 percentage points.
You can find the full results of the survey on the AICPA website here.