Financial executives’ expectations about the economy over the coming year dropped in a new survey from the AICPA. It’s the first decrease in two years. And that’s not good news for job seekers. IT spending plans dip, too.

Optimism dipped in every category the group tracks with the exception of attitudes about the overall U.S. economy.

The survey tracks attitudes in:

  • US Economy Optimism – (+2) Respondent optimism about the US economy.
  • Organization Optimism – (-4) Respondent optimism about prospects for their own organization.
  • Business Expansion – (-7) Respondent expectations of whether their business will expand over the next 12 months.
  • Revenues – (-7) Expectations for revenue over the next 12 months.
  • Profits – (-7) Expectations for profits over the next 12 months.
  • Employment – (-5) Expectations for headcount over the next 12 months.
  • IT Spending – (-4) Plans for IT spending over the next 12 months.
  • Other Capital Spending – (-4)Plans for capital spending over the next 12 months.
  • Training & Development – (-5) Plans for spending on employee training and development over the next 12 months.

So what’s causing the concern among financial executives?

Multiple reasons, the Economic Outlook Survey from the American Institute of Certified Public Accountants released Thursday morning says.

The attitudes of 848 executives are “more tempered” although expectations for the overall economy remain good.

Highlights:

  • “Domestic Competition” is now the No. 2 challenge for businesses, up three spots from last quarter. “Regulatory Requirements/Changes’ remains the top challenge.
  • The number of survey takers who said their businesses are hiring immediately dropped slightly from 23 percent last quarter to 21 percent this quarter. A majority of respondents (52 percent), however, continue to say they have the right amount of employees.
  • Some 64 percent of businesses said they expect to expand in the next year, down from 71 percent last quarter.
  • Anticipated growth for profits in the coming year dropped from 3.9 percent last quarter to 2.8 percent.
  • Revenue growth expectations also fell from 4.7 percent to 3.6 percent.
  • Some 47 percent of survey takers said the decline in oil prices has had a somewhat positive impact on their business, while 28 percent said it was neutral.

While optimism certainly hasn’t vanished, the AICPA says “there has been a retrenchment in sentiment since last quarter” with the overall rating for the economy dipping four points to 74 on a scale of 0-100.

“It’s important to note that we’re seeing higher optimism on most business indicators we track than we did a year ago,” said Arleen Thomas, AICPA’s senior vice president of management accounting and global markets. “But it’s also clear we’re seeing a reset this quarter on expectations for several key categories, and that’s something to be mindful of going forward.”

Read more at: http://www.aicpa.org