The potential effects of trade and tariff policies and rising interest rates helped dampen U.S. business executives’ optimism about the American economy in the third quarter, according to the American Institute of CPAs’ latest economic outlook survey.
Sixty-nine percent of survey participants said they were optimistic about the economy over the next 12 months, down five percentage points from the second quarter and down 10 points from the start of the year.
Optimism about their own company’s outlook also slipped, down one point to 69%.
Still, both rates remained strong from a historical perspective, AICPA noted in a statement.
Expectations for profit and revenue growth over the next 12 months rebounded after a dip last quarter. Profit growth estimates rose to 4.3% from 4%, while revenue growth expectations grew from 4.8% to 5%.
“It’s unusual to see a decrease in U.S. economic optimism when key performance indicators such as profit and revenue are perceived to be on the rise,” Arleen Thomas, Americas managing director of CGMA global offerings at the Association of International Certified Professional Accountants, said in the statement.
“On the one hand, business executives are encouraged by the impact of federal tax reform and reduced regulation at home, but there is some concern about trade wars, interest rate hikes and other factors that could contribute to a global economic slowdown.”
For the fifth consecutive quarter, availability of skilled personnel was the top challenge for businesses, according to the survey. Overall, 46% of business executives said their companies currently had the right number of employees.
Of the 44% who reported having too few employees, only 12% said they were reluctant to hire, a post-recession low, while 32% said they planned to hire immediately, a post-recession high.
The AICPA survey, conducted midsummer, comprised 1,242 qualified responses from CPAs who hold leadership positions, such as chief financial officer or controller, in their companies.