Executives’ economic outlook improves slightly

CPA business executives’ outlook on the economy has slightly improved since last quarter, but they are still wary of inflation and tariff impacts.

The third-quarter AICPA and CIMA Economic Outlook Survey found that 34% of business executives who are also CPAs expressed optimism in the U.S. economy’s outlook over the next 12 months, up from 27% the previous quarter. This quarter’s figure is significantly lower than the post-election high of 67% in the fourth quarter last year but remains higher than 26% in the third quarter last year.

Fifty-four percent of respondents say they expect a recession either this year or the next, given the uncertainty about inflation and tariffs — an improvement from 61% last quarter. Inflation also rose to the top-ranking concern, displacing “domestic economic conditions.”

“Survey participants noted some positives, such as pro-business provisions in the recently enacted H.R. 1 and more favorable regulatory policies under the current administration,” Tom Hood, executive vice president of business engagement and growth at the Association of International Certified Professional Accountants, said in a statement. “But volatility in trade policy continues to pose planning challenges. With tariff effects still playing out, the next quarter could prove pivotal in shaping economic sentiment.”

The American Institute of CPAs and the Chartered Institute of Management Accountants polled 275 chief executives, chief financial officers, controllers and other CPAs in U.S. companies who hold executive and senior management accounting roles. The quarterly survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months.

The survey also found that hiring remains stable overall, with some changes at the margins: 16% say they are looking to hire new employees immediately, up two points from last quarter, and 14% say they had too many employees, also up two points.

Revenue growth for the next 12 months is projected at 1.5%, the same as a year ago and a 0.5 point increase from last quarter. Profit expectations, which were negative last quarter, are projected at 0.1%.

Meanwhile, 37% of respondents say they are favorable about their own organization’s prospects over the next 12 months, the same as last quarter and down four points from last year. And the percentage of respondents who expect their businesses to expand over the next 12 months increased to 46%, up three points from last quarter.