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Fifty-four percent of business executives in a fourth-quarter survey said they expected their organizations to experience negative effects if a renewed round of economic stimulus is not forthcoming early in the new year, the American Institute of CPAs reported Thursday.

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Nearly half of survey participants said lack of renewed stimulus would have a slight or moderate effect on their companies, but 8% predicted it would have a significantly negative one.

In contrast, 34% of survey respondents said a stimulus package would have no effect on their company’s fortunes, while 7% predicted a positive effect. Five percent were unsure what consequences would emerge.

Timing of the implementation of stimulus is also important, the survey showed: 23% of business executives said it would have to come in the next month or two to be effective.

The survey was conducted from Nov. 10 to Dec. 2 among 740 CPAs who hold leadership positions, such as chief financial officer or controller, in their companies.

The AICPA noted that its survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months. The CPA Outlook Index — a comprehensive gauge of executive sentiment within the AICPA survey — rebounded into positive territory in the fourth quarter, and now stands at 62, up from 54 last quarter.

The index is a composite of nine equally weighted survey measures set on a scale of zero to 100, with 50 considered neutral, and higher numbers signifying positive sentiment.

Improved Economic Outlook

Despite rising cases of coronavirus, business executives’ outlook on the U.S. economy improved in the fourth quarter, with 37% expressing optimism about prospects over the next 12 months, up from 24% last quarter.

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Respondents’ optimism about the outlook for their own companies also rose, from 41% to 49% expressing optimism. Both indicators continue to show wariness about economic conditions, however, the AICPA noted.

“Business executives overwhelmingly say containment of the pandemic is the most important thing government can do right now to help them, eclipsing renewed stimulus, business relief or keeping taxes and regulation in check,” according to Ash Noah, managing director of CGMA learning, education and development for the Association of International Certified Professional Accountants.

“There are signs of optimism from our survey respondents that some answers lie ahead on the pandemic — stronger profit and revenue expectations, for example, and a better hiring outlook.”

Fifty-five percent of business executives surveyed said their companies are back to — or exceed — pre-pandemic staffing levels, with another 13% expecting to get there within 12 months.

There are exceptions, however. The hospitality and leisure sector, for one, continues to show contraction. Some 14% of companies say they do not expect to get back to pre-pandemic staffing levels for several years.

In the near term, 17% of business executives said their companies planned to hire immediately, up from 13% last quarter and 7% in the second quarter.

Other Key Findings 

Profit and revenue expectations no longer show contraction. Business executives now project that revenue will increase at a rate of 1.2% over the coming 12 months, up from a projected decline of 0.6% last quarter.

They now project profits to be positive 0.2%, up from a projected decline of 1.2%.

Forty-seven percent of survey respondents said their companies planned to expand in the next 12 months, up three percentage points from last quarter.

Twenty-seven percent expressed optimism about the global economy, up from 17% last quarter.

As to the top issues affecting their businesses, survey respondents again put domestic economic conditions and domestic political leadership on the list. Availability of skilled personnel edged back into the third spot, displacing employee and benefit costs.

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