Unemployment, government regulation and availability of credit caused optimism among CPA financial executives to drop sharply this quarter, and now half of executives do not expect the U.S. economy to return to pre-recession levels until after 2012, according to a survey conducted by the AICPA and the University of North Carolina’s Kenan-Flagler Business School.


Results from the AICPA/UNC Kenan-Flagler Business & Industry Economic Outlook Survey, 3Q 2010, found that 21% of respondents were optimistic or very optimistic about the outlook for the U.S. economy for the next 12 months, the lowest level of optimism recorded since April 2009. This is down significantly from 40% who showed optimism during the second quarter of 2010.


Total pessimism increased this quarter, with 40% of respondents reporting they were very pessimistic or pessimistic about the U.S. economy, up from 25% last quarter. The remaining 39% of respondents were neutral.


The survey, conducted between July 21 and Aug. 5, includes responses from 1,583 CPA executives in business and industry.


Respondents most often cited unemployment and government regulations and policies as reasons for their pessimistic outlook. Credit tightening was also cited by many executives, but was mentioned more frequently by small business executives.


Key performance indicators—revenue and employment—remained steady in the third quarter. Fifty-eight percent of respondents expect to see revenue increase in the coming 12 months, while 27% expect it to decrease. Expectations for hiring also remained stable from last quarter, but continue to lag when compared with expectations for revenue. Overall, 34% said they expect to increase the number of employees at their business, 21% expect decreases, and 45% expected no change in employment levels. By industry, employment prospects look the best in the technology sector, with 53% planning to increase staff.


“The overall results confirm that the recovery has slowed, but that managers remain cautiously optimistic,” said Mark Lang, CPA, Ph.D., a Kenan-Flagler accounting professor who analyzed the survey results.


“However, uncertainty about the sustainability of the recovery continues to limit planned investment and hiring. The next few months will be crucial in determining whether uncertainty resolves to the point where firms are willing to significantly increase spending and hiring.”


Full survey results are available at


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