Optimism concerning the outlook for the US economy plunged again this quarter in the AICPA/UNC Kenan-Flagler Business & Industry Survey of CPA Financial Decisionmakers and for the first time in the survey’s history pessimists now outnumber optimists. This quarter 59% of respondents said they were Pessimistic or Very Pessimistic about the outlook for the US economy for the next 12 months. Not quite 12% said they were optimistic. The corresponding percentages in 4Q 2007 were 26% pessimistic and 30% optimistic. Optimism did vary across industries with pessimism most predominant in the Finance & Insurance, Retail Trade, and Manufacturing industries. Respondents from the Technology industry were most optimistic.
When asked to comment on why their confidence in the US economy had changed the majority of respondents mentioned the housing and mortgage credit market. Another large group felt that the current negativity reflected a self-fulfilling prophecy of negativity begetting negativity. Still another sizable group was concerned about the stock market. For those whose confidence had increased the largest driver was the recent actions taken by the Fed.
Respondents’ optimism about their own organizations continued to be much greater than their optimism about the US economy. When asked about their own organization 46% of respondents answered that they were optimistic or very optimistic while only 21% expressed pessimism. While this still represents a decline from the 4Q 2007 survey in which 59% of respondents expressed optimism, the decline is not nearly as sharp as the decline for the US economy. In addition optimists still outnumber pessimists by over a 2 to 1 margin. This continued optimism is backed up by expectations for business expansion with 54% of respondents expecting their business to expand at least a little in the next 12 months. Other indicators of business growth continued to be positive with most organizations expecting to see increases in revenue, profits, and number of employees. While even these expectations are down slightly the number of respondents expecting increases still exceed the number expecting decreases by a large margin.
For more details on this quarter's survey please see the report and charts.
Download Survey Report (pdf)
Download Detailed Survey Charts (pdf)