A majority of CFOs and senior executive accountants believe the U.S. economy is already in recession and will continue its slowdown for a third consecutive quarter, according to a survey conducted by the American Institute of Certified Public Accountants.
To make matter worse, the executives doubt the economy will improve in the next 12 months.
“Our members are still seeing increased pressure on profits from rising costs without the ability to raise prices,” Chris McKittrick, the AICPA’s director of members, said in a statement released Thursday, August 14. “Expectations for revenue and hiring are trending downward.”
Mark Lang, a professor of accounting at the University of North Carolina’s Kenan-Flagler Business School, which helped conduct the survey, added, “The fact that firms continue to reduce planned growth in capital investment, staff development and employment is particularly troubling since it suggests that the slowdown could have long-term implications.”
Nevertheless, CFOs remain more optimistic about their own organizations than the broader U.S. economy, which led the AICPA to believe the tough times may be limited to certain industries.
Only 27 percent of finance executives said they were pessimistic or very pessimistic about their company’s economic prospects in the next 12 months, up from 22 percent in the second quarter. By contrast, 62 percent said they were pessimistic or very pessimistic about the U.S. economic outlook over the next 12 months, up from 57 percent in the second quarter.
When asked about specific policies that could help to stabilize the economy, a majority of finance executives said Congress and the Federal Reserve should refrain from pumping more cash into the economy. Some 36 percent support opening up additional land and offshore areas for drilling and 27 percent support additional financial incentives for alternative energy.
More than 1,180 respondents participated in the online survey, which was conducted in late July and early August.
Filed by Marine Cole of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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