More than half of business executives (54%) expect some negative impact to their organizations if a renewed round of economic stimulus does not materialize by early 2021, according to the Q4/20 AICPA Economic Outlook Survey. The survey polled CEOs, CFOs, controllers and other certified public accountants in U.S. companies who hold executive and senior management accounting roles.

Most survey respondents said a lack of renewed stimulus would have a slight (28%) or moderate (18%) negative impact on their companies, although 8% predicted it would have a significantly negative impact.
Roughly a third of survey respondents (34%) said a stimulus package would have no impact on their company’s fortunes. Meanwhile, 7% predicted a positive impact, while 5% said they weren’t sure what consequences would emerge.

Timing of the implementation of stimulus is also important: 23% of business executives said it would have to come in the next month or two to be effective.

Despite rising cases of COVID-19, business executives had an improved outlook on the U.S. economy this quarter, with 37% expressing optimism about prospects over the next 12 months compared with 24% last quarter. Survey takers’ optimism about the outlook for their own companies also rose from 41% to 49%. Both indicators continue to show wariness about economic conditions, however.

“Business executives overwhelming say containment of the pandemic is the most important thing government can do right now to help them, eclipsing renewed stimulus, business relief or keeping taxes and regulation in check,” Ash Noah, CPA, CGMA, managing director of CGMA learning, education and development for the Association of International Certified Professional Accountants, said. “There are signs of optimism from our survey respondents that some answers lie ahead on the pandemic — stronger profit and revenue expectations, for example, and a better hiring outlook.”

According to the survey, 55% of business executives said their companies are back to — or exceed — pre-pandemic staffing levels, with another 13% expecting to get there within 12 months. This isn’t evenly distributed, however, as the hospitality and leisure sector, for one, continues to show contraction. In addition, 14% of companies said they don’t expect to get back to pre-pandemic staffing levels for several years.

In the near term, 17% of business executives said their companies plan to hire immediately, up from 13% last quarter and 7% in the second quarter.

The AICPA survey tracks hiring and business-related expectations for the next 12 months. The CPA Outlook Index — a gauge of executive sentiment within the AICPA survey — rebounded into positive territory. It now stands at 62, up from 54 last quarter. The index is a composite of nine, equally weighted survey measures set on a scale of zero to 100, with 50 considered neutral and higher numbers signifying positive sentiment.

Other key findings of the survey:

• Profit and revenue expectations no longer show contraction. Revenue is now projected to increase at a rate of 1.2% over the coming 12 months, up from a projected decline of -0.6% last quarter. Profits are now projected to be 0.2%, up from a projected decline of -1.2%.
• 47% of survey respondents said their companies plan to expand in the next 12 months, up three percentage points from last quarter.
• 27% of business executives expressed optimism about the global economy, up from 17% last quarter
• “Domestic economic conditions” and “domestic political leadership” remained unchanged as the No. 1 and No. 2 issues impacting business. “Availability of skilled personnel” edged back into the third spot, displacing “employee and benefit costs.”

The fourth-quarter AICPA Business and Industry Economic Outlook Survey was conducted from Nov. 10 to Dec. 2 and included 740 qualified responses from CPAs who hold leadership positions, such as CFO or controller, in their companies. The overall margin of error is fewer than three percentage points.