Executive adopt dimmer view of short-term prospects.

• Author: Ladd, Scott
• Position: ECONOMY - Survey

Business leaders appear to be more guarded in their assessment of the U.S. economy over the next 12 months than they were in the first quarter of 2012, the second-quarter AICPA Economic Outlook Survey has found.

The survey of chief executives, chief financial officers, controllers and other certified public accountants in executive and senior management accounting roles (conducted May 16-31) reports that most company leaders are more optimistic about the prospects for their own businesses than the economy as a whole. But anxiety about hiring has grown since the start of the year. This is based on the 1,250 qualified responses from CPAs who hold leadership positions in their companies.

The CPA Outlook Index--a comprehensive gauge of executive sentiment that is a key component of the Economic Outlook Survey--dropped two points in the latest study after two straight quarters of improved numbers. The index is a composite of nine equally weighted survey measures graded on a scale from 0 to 100, with 50 considered neutral and numbers below that mark signifying negative sentiment, numbers above a point of optimism.

The second-quarter grade, which stood at 67, mirrors a trend from 2011 when a first-quarter surge in optimism about the economy later lagged because of fears of a stalled recovery.

Arlene Thomas, AICPA's senior vice president for management accounting, described the most recent survey results as reminiscent of the "two steps forward, one step back cycle we encountered last year."

"There's no question survey takers have grown more pessimistic about the U.S. economy, and with expectations muted for profit, revenue and employment growth, there appear to be few catalysts to change that view," she says.

Overall, optimism for the U.S...