Business executives’ optimism about the U.S. economy in the third quarter sank to its lowest level in three years, the American Institute of CPAs reported Thursday.
Forty-two percent of business leaders in a new survey said they were optimistic about the economy’s outlook over the next 12 months, down from 57% who expressed that view in the previous three quarters.
The report noted that positive sentiment about the economy had soared to 79% in early 2018, and had not dipped below 50% since the 2016 third quarter, when it hit 38%.
The third-quarter survey was conducted from July 30 to Aug. 21 among 755 CPAs who hold leadership positions, such as chief financial officer or controller, in their companies.
Forty-five percent of respondents blamed trade conflicts for some negative effect on their business over the past 12 months; 16% said this had been significant or moderate.
And they did not expect things to improve, with 54% anticipating negative global trade effects on their business over the next 12 months compared with the past year.
“Global trade tensions have been an issue for some time now, but it’s clear business executives are more concerned about growing volatility and risk in this area,” Bob Sannerud, chair of the Association of International CPAs’ Americas regional advisory panel and chief financial officer of Life Link, said in a statement.
“We’re seeing that uncertainty weighing on spending and hiring plans over the past few quarters.”
Business executives in the survey were more positive about their own companies’ outlooks and expansion plans than about the U.S. and global economies in general, but these categories had also fallen to three-year lows, according to the report.
Profit and revenue growth expectations for the next 12 months were 2.8% and 4.2%, respectively, both down 1.5 percentage points from a year ago and at their lowest level since the third quarter of 2016.