The results of December 2005 show a very similar pattern that was revealed in the June 2005 Survey with more optimism being expressed about the prospects for respondents’ own organizations than for the economy as a whole.

·         With respect to individual companies, 74% continue to be optimistic or very optimistic about the prospects of their own organization over the next six months.

·         However, consistent with our finding in June 2005, this sentiment did not translate directly to the same level of optimism for the economy as a whole; only 60% of respondents continue to be optimistic, or very optimistic about the economy at the macro level; up slightly from 57% in June 2005, but down from 71% in December 2004.

·         Growth, spending, financing and workforce plans continue to support the strength represented by this positive outlook across companies of all sizes.

·         While there is some concentration of growth from non-US market sources in the largest companies, over 60% of companies in each of the four size categories expect either moderate or substantial increases in growth from US market sources over the next six month period.

·         Spending for IT continues to be strong across the board as well, with 55% of all companies expecting to increase IT spending as compared to only 5% expecting IT spending reductions; 10% expect their IT spending to increase substantially.

·         Workforce increases are also expected to continue; 45% of all companies anticipate increases in total workforce size in the next six months, compared to 40% who were anticipating increases as of June 2005. Only 11% of all companies surveyed anticipate workforce reductions in the next six months with somewhat higher frequency among companies in the over $1 billon category.

More than 50% of the respondents indicated being more concerned in December 2005 than six months prior about: (1) energy costs; (2) employee costs; and (3) materials, supplies or equipment costs. Concern about energy costs topped the charts with 85% of all respondents being more concerned about energy costs than they had been six months earlier.

As with past surveys, we also queried members on a few policy issues.

·         With regard to monetary policy—CPAs continue to be more concerned about the impact of changes in short-term interest rates on inflation than unemployment.

·         When asked about proposals for US trade policy with China:

o        70% indicated support for the current US policy of supporting gradual revaluation of the Chinese Yuan vis-à-vis the US dollar;

o        23% support treating currency manipulation as a trade violation and imposing sanctions;

o        7% support imposing sanctions without declaring currency manipulation as a trade violation.

• When asked about the President’s Advisory Panel on Tax Reform’s recommended plans:
  
  

o        55% indicated a preference for the Simplified Tax Plan (primarily impacting individual taxes);

o        45% indicated a preference for the Growth and Investment Tax Plan (including more significant changes in business taxes).

This article originally appeared in the February 6, 2006 edition of BusIndNews.

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