Optimism Slips in Q2
The latest AICPA & CIMA Economic Outlook Survey shows sentiment among CPA business decision-makers declining in the second quarter. Approximately 35% of respondents expressed optimism about the U.S. economy over the next 12 months, down from 43% the prior quarter.
The survey ran from May 7 to May 28, 2024, capturing 315 responses from CPA executives serving as CEOs, CFOs, controllers, and in other senior roles across U.S. companies.
The Drivers of Caution
Respondents attributed declining optimism primarily to three factors:
- Persistent inflation that has continued to complicate planning
- Interest rates and uncertainty about the timing and magnitude of any path toward cuts
- Election-year uncertainty and the policy volatility it introduces
Geopolitical tensions were cited separately as a compounding concern.
Conflicting Signals
Tom Hood, AICPA & CIMA's executive vice president for business engagement, noted the results contain genuine tension: top-line inflation concerns are rising even as revenue and profit expectations edged higher.
Key indicators from the survey:
- Profit expectations over the next 12 months: +1.5%
- Expected revenue growth: 2.9% — more than double year-earlier projections
- Organizational optimism: 48%, down slightly from 49%
- Companies planning expansion: 54%, up from 51%
Hiring Picture Softens
The hiring outlook has weakened at the margin:
- 29% report too few employees — down from 37%
- 16% plan immediate hiring
- 13% hesitate due to broader uncertainty
Implications
The survey reflects an economy sending mixed signals rather than a directional trend. CFOs and CEOs remain willing to invest and hire but are doing so more cautiously and with shorter time horizons than earlier in the cycle. Firms advising these clients should expect longer decision cycles and heightened scrutiny on discretionary projects.