What You Need to Know
- AICPA found that 77% of executives surveyed are particularly concerned about raw material and labor costs.
- Executives said two of their main challenges in the third quarter are finding skilled employees and staff turnover.
- Expectations for both profit and revenue growth over the next 12 months also fell.
Business executives’ optimism about the U.S. economy has dimmed as the third quarter gets underway, the American Institute of CPAs reported Thursday.
Only 51% of executives expressed optimism about the U.S. economy over the next 12 months, a steep drop from last quarter’s measure of 70%.
AICPA’s third-quarter business and industry economic outlook survey was conducted from Aug. 3 to Aug. 23 among 669 CPAs who hold leadership positions, such as chief financial officer or controller, in their companies.
Survey respondents cited several reasons for the decline in optimism. Seventy-seven percent of them said they are now concerned about inflation, particularly regarding raw material and labor costs. Salary and benefit costs are expected to increase at a rate of 3.7%, or higher than at any time since the pre-recession economy.
To combat rising costs, 37% of executives said they are imposing price increases, 34% are cutting costs and 20% are stockpiling materials and components, among other strategies.
Some 40% of business executives said their companies have too few employees and are looking to hire immediately. Another 14% said they also have too few employees but are hesitant to hire.
In a sign of the stresses in the job market, executives surveyed said two of their main challenges in the third quarter are availability of skilled personnel and staff turnover.