aicpa business and industry economic outlook survey€¦ · 2q 2017 economic outlook survey survey...
TRANSCRIPT
AICPA Business and Industry Economic Outlook SurveyDetailed Survey Results: 2Q 2017
2Q 2017 Economic Outlook Survey
Survey Background
• Conducted between May 2-17, 2017
• Quarterly Survey
• CPA decision makers (primarily CFO’s, CEOs and Controllers)
• AICPA members in Business & Industry only
• 726 qualified responses
Survey Highlights
2Q 2017 Economic Outlook Survey
75Overall index eases a point
Down from 76 in Q1; up from 68 year-to-year from Q2, 2016
Slight declines, or flat across most components
Employment and IT spending continue to inch up
64%Now optimistic about U.S. Economy
Outlook for economy gives up 5% from new high mark of 69% in Q1
Retail trade rebounds to 58%, from only 38% in Q1
Healthcare also improves from 43% to 52%
Other sectors decline slightly
64%Have expansion plans, but size matters
Overall, expansion plans ease only slightly from 67% to 64%
Percentages of SME and mid-sized companies with expansion plans fall off sharply from Q1
Percentages of larger mid-sized and those with revenues > $1b increase slightly
CPA Outlook Index (CPAOI)
2Q 2017 Economic Outlook Survey
• The CPA Outlook Index is the composite of the following nine indicators at equal weights:
• U.S. Economy Optimism - Respondent optimism about the U.S. economy• Organization Optimism - Respondent optimism about prospects for their own organization• Expansion Plans - Respondent expectations of whether their business will expand over the next
12 months • Revenue - Expectations for increases or decreases in revenue over the next 12 months• Profits - Expectations for increases or decreases in profits over the next 12 months• Employment - Expectations for increases or decreases in headcount over the next 12 months • IT Spending - Plans for IT spending over the next 12 months• Other Capital Spending - Plans for capital spending over the next 12 months• Training & Development - Plans for spending on employee training and development over the
next 12 months
• A reading above 50 indicates a generally positive outlook with increasing activity. A reading below 50 indicates a generally negative outlook with decreasing activity.
The CPA Outlook Index is
a robust measure of
sentiment about the U.S.
economy that is
supported by the
unique insight and
knowledge that CEOs,
CFOs, Controllers, and
other CPA executives
have about the prospects
for their own
organizations, their
expectations for
revenues and profits, and
their plans for spending
and employment.
2Q 2017 Economic Outlook Survey
CPA Outlook Index (CPAOI)
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17CPA Outlook
Index 67 63 59 66 69 69 69 70 72 75 78 74 72 71 69 63 68 69 74 76 75
6763
5966
69 69 69 70 7275
7874 72 71 69
6368 69
74 76 75
2Q 2017 Economic Outlook Survey
CPA Outlook Index (CPAOI)
Component 2Q16 3Q16 4Q16 1Q17 2Q17∆Q to
Q∆Y to
YU.S. Economic Optimism 59 58 76 79 77 02 18Organization Optimism 68 68 74 77 76 01 8Expansion Plans 69 72 74 77 76 01 7Revenue 74 75 78 81 79 02 5Profits 63 69 74 74 72 02 11Employment 63 66 68 71 72 01 9IT Spending 76 75 77 78 80 02 04Other Capital Spending 70 71 73 71 72 01 02Training & Development 67 70 71 73 73 00 06Total CPAOI 68 69 74 76 75 01 07
CPA Outlook Index (CPAOI) vs. GDP
2Q 2017 Economic Outlook Survey
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17CPA Outlook
Index 63 68 69 74 76 75
Changein GDP 0.8% 1.4% 3.2% 2.1% 0.7%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
0
10
20
30
40
50
60
70
80
90
100
GDP Growth
CPA Outlook Index
U.S. Economy, Organization and Inflation
2Q 2017 Economic Outlook Survey
64%Optimism for U.S. economy declines from Q1 high of 69%Chaos and uncertainty noted by both optimists and pessimists
Hopes for regulatory relief, tax reform, and infrastructure spending continue
Concerns expressed about i-rates, possibility of RE and stock markets being overvalued, and proposed changes more aimed at large scaled entities
64%Organization optimism falls slightlyOptimism for respondent’s own organization eases 2 points from 1Q high of 66%
The percentage of companies with expansion plans also eased from 67% in Q1 to 64%
The percentage of companies expecting their businesses to contract remained constant with Q1 at 13%
31%Now concerned about inflation Concern about labor costs continues to be most significant, increasing from 40% to 42%
Raw material cost increases also increase another point to 25%, up from 24% in Q1, and 20% in Q4, 2016
Energy cost concerns constant at 8%
Interest rate worries up from 21% to 22%
The economic outlook for the U.S. economy, your organization, and the expansion plans over the next 12 months
2Q 2017 Economic Outlook Survey
Optimism & Expansion
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17U.S. 34% 22% 21% 32% 49% 44% 38% 49% 51% 52% 64% 68% 52% 48% 45% 28% 37% 38% 62% 69% 64%
Organization 54% 44% 41% 50% 57% 55% 57% 59% 61% 65% 67% 63% 58% 59% 53% 44% 53% 53% 61% 66% 64%
Expansion 61% 56% 50% 58% 62% 62% 62% 63% 64% 68% 71% 64% 61% 60% 57% 52% 58% 62% 62% 67% 64%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
For your business, over the next 6 months, which are you more concerned about? Inflation or deflation?
2Q 2017 Economic Outlook Survey
Inflation or Deflation
33% 32% 31%36%
30%35%
31% 29%32%
38%
27%23% 23%
25% 23%
14%
23%
11%
28%
33%31%
9% 10% 9%6% 7% 7% 7% 8% 6% 5%
10% 12% 10% 10% 11%
22%
12%
18%
4% 3% 5%
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Inflation Deflation
Which of the following potential inflationary factors represents the most significant risk to your business?
2Q 2017 Economic Outlook Survey
Food costs Energycosts
Raw materialcosts Labor costs Interest
rates Other
2Q16 0% 11% 20% 44% 16% 9%
3Q16 4% 5% 18% 55% 14% 4%
4Q16 1% 10% 20% 43% 23% 4%
1Q17 2% 8% 24% 40% 21% 5%
2Q17 2% 8% 25% 42% 22% 1%
0%
11%
20%
44%
16%
9%
4% 5%
18%14%
4%1%
10%
20%
43%
23%
4%2%
8%
24%
40%
21%
5%2%
8%
25%
42%
22%
1%
Inflationary Risk Factors
55%
Key Performance Indicators
2Q 2017 Economic Outlook Survey
Revenues and Profits Revenue and Profit projections both give back some Q1 gains
Expected revenue increase for coming twelve months declines from 4.3% in Q1 to 3.9% in Q2
Profit projections also decline from 3.5% in Q1 to 3.2%
Hiring and Employment Headcount plans remain constant; costs ease slightly
Anticipated rate of headcount increase for the coming year remained constant at 1.8%
Salary and benefit costs eases a tenth from 2.3% in Q1 to 2.2% in Q2
Healthcare cost projections also to fall another tenth from 5.6% in Q1 to 5.5% in Q2
Spending PlansIT, Other Capital and Training improve; Marketing and R&D ease slightlySpending for IT improves to a 3.2% projected increase in Q2, up from 3.0% in Q1
Other capital spending rate increases from 2.6% to 2.8%
Training also ticks up from to 1.8% to 2.0%
Marketing eases from 1.9% in Q1 to a 1.8% rate in Q2
R&D spending returns to 1.5%, after increasing to 1.7% in Q1
Key Performance IndicatorsExpected Growth in Revenue and Profits Thinking about the
coming 12 months, please comment on the probable change for your organization foreach of the following key performance indicators: please select one growth rate for each item, from increasing by more than 10% to decreasing by more than 10%.…
2Q 2017 Economic Outlook Survey
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17Revenue 3.1% 2.6% 2.1% 3.0% 3.1% 3.3% 3.6% 3.6% 3.8% 4.4% 4.7% 3.6% 3.2% 3.3% 2.9% 1.7% 3.0% 2.9% 3.6% 4.3% 3.9%Profit 2.6% 2.2% 1.4% 2.1% 2.4% 2.5% 2.7% 2.9% 2.9% 3.6% 3.9% 2.8% 2.4% 2.6% 2.0% 0.7% 1.5% 2.3% 3.1% 3.5% 3.2%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Key Performance IndicatorsEmployees, Salary & Benefits, and Healthcare Costs Thinking about the
coming 12 months, please comment on the probable change for your organization foreach of the following key performance indicators: please select one growth rate for each item, from increasing by more than 8% to decreasing by more than 8%.…
2Q 2017 Economic Outlook Survey
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17Employees 1.1% 0.8% 0.5% 1.1% 1.0% 1.3% 1.2% 1.5% 1.3% 1.8% 2.1% 1.6% 1.5% 1.3% 1.0% 0.5% 1.1% 1.3% 1.6% 1.8% 1.8%Salary & Benefits 2.0% 1.9% 1.9% 2.2% 2.2% 2.3% 2.2% 2.2% 2.1% 2.4% 2.5% 2.0% 2.1% 2.0% 1.8% 1.4% 1.8% 2.1% 2.3% 2.3% 2.2%Healthcare 6.3% 6.4% 6.4% 6.3% 6.7% 6.8% 6.6% 6.2% 5.7% 6.6% 5.9% 5.8% 5.8% 5.8% 5.4% 5.4% 5.7% 5.6% 6.1% 5.6% 5.5%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Key Performance Indicators
Pricing & Other Costs Average Change ExpectedThinking about the coming 12 months, please comment on the probable change for your organization foreach of the following key performance indicators: please select one growth rate for each item, from increasing by more than 80% to decreasing by more than 8%.…
2Q 2017 Economic Outlook Survey
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17Prices Charged 1.2% 1.2% 1.1% 1.3% 1.1% 1.3% 1.3% 1.3% 1.8% 1.7% 1.7% 1.4% 1.4% 1.6% 1.5% 0.8% 1.3% 1.5% 1.8% 1.9% 1.9%Input Prices 1.9% 1.9% 1.9% 2.0% 1.8% 1.9% 1.8% 1.8% 2.4% 2.3% 2.1% 2.1% 2.0% 2.2% 2.1% 1.5% 2.1% 1.9% 2.4% 2.4% 2.5%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Key Performance IndicatorsSpending Plans - IT, Other Capital & Training Thinking about the
coming 12 months, please comment on the probable change for your organization foreach of the following key performance indicators: please select one growth rate for each item, from increasing by more than 10% to decreasing by more than 10%.…
2Q 2017 Economic Outlook Survey
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17IT 2.8% 2.4% 2.1% 2.7% 2.8% 2.7% 2.9% 3.2% 3.1% 3.3% 3.3% 3.1% 3.1% 3.0% 2.8% 2.3% 2.6% 2.8% 2.9% 3.0% 3.2%Other Capital 2.0% 1.7% 1.3% 1.9% 2.2% 2.2% 2.1% 2.3% 2.4% 2.9% 3.2% 2.4% 2.4% 2.5% 2.4% 1.5% 2.1% 2.4% 2.7% 2.6% 2.8%Training 1.2% 1.0% 0.7% 1.3% 1.3% 1.3% 1.5% 1.7% 1.8% 2.0% 2.2% 1.6% 1.8% 1.4% 1.4% 1.1% 1.3% 1.6% 1.6% 1.8% 2.0%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Key Performance IndicatorsSpending Plans Marketing & R&D Thinking about the
coming 12 months, please comment on the probable change for your organization foreach of the following key performance indicators: please select one growth rate for each item, from increasing by more than 10% to decreasing by more than 10%.…
2Q 2017 Economic Outlook Survey
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Marketing 1.5% 1.1% 1.0% 1.5% 1.4% 1.5% 1.5% 1.7% 1.6% 1.6% 1.8% 1.6% 1.8% 1.6% 1.6% 1.4% 1.4% 1.4% 1.5% 1.9% 1.8%
R&D 1.0% 0.6% 0.6% 0.9% 1.0% 1.0% 1.0% 1.0% 1.0% 1.2% 1.3% 1.3% 1.2% 1.7% 1.2% 0.9% 1.1% 1.1% 1.5% 1.7% 1.5%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Hiring Plans
2Q 2017 Economic Outlook Survey
50%Have right number of employees
Down slightly from 52% in Q1, 2017
Continue to Improve
8%Have an excess of employees
Unchanged from Q1, 2017; Down from 13% in Q3, 2016
16%Have too few, but hesitating to hire
Consistent with Q1; down a point from Q2, 2016
24%Have too few and planning to hire
Up from 22% in Q1, and up 5% from 19% in Q2, 2016
Hiring PlansOverall staff situation relative to your needs
Given current conditions, how would you characterize your overall staffing situation relative to your needs (i.e., do you have excess capacity or are employees stretched)?
2Q 2017 Economic Outlook Survey
We have anexcess number of
employees
We haveapproximately the
appropriatenumber ofemployees
We have too fewemployees, butare hesitating to
hire
We have too fewemployees andare planning to
hireOther
2Q16 12% 49% 18% 19% 2%3Q16 13% 48% 17% 21% 1%4Q16 9% 55% 15% 20% 1%1Q17 8% 52% 16% 22% 2%2Q17 8% 50% 16% 24% 2%
12%
49%
18% 19%
2%
13%
48%
17%21%
1%
9%
55%
15%
20%
1%
8%
52%
16%
22%
2%
8%
50%
16%
24%
2%
Please indicate the top three challenges for your organization
2Q 2017 Economic Outlook Survey
Top Challenges Facing Organizations
Employee and benefit costs maintained its top spot in the ranking of challenges
Availability of skilled personnel moved up a notch, replacing regulatory requirements which slipped from second to third
Domestic economic conditions and domestic competition maintained their fourth and fifth place positions
Staff turnover jumped from ninth to sixth, while changing customer preferences fell from sixth to tenth
Domestic political leadership dropped two more slots from seventh to ninth
Developing new products/services moved up from the seventh to the sixth slot
Materials/supplies/equipment costs, which returned to the top ten in Q1, moved up two notches to eight
2Q 2017 Economic Outlook Survey
Top Challenges2Q16 3Q16 4Q16 1Q17 2Q17
1 Regulatory requirements/changes
Regulatory requirements/changes
Regulatory requirements/changes
Employee and benefits costs
Employee and benefits costs
2 Domestic economic conditions
Domestic economic conditions
Employee and benefits costs
Regulatory requirements/changes
Availability of skilled personnel
3 Availability of skilled personnel
Availability of skilled personnel
Domestic economic conditions
Availability of skilled personnel
Regulatory requirements/changes
4 Domestic competition Domestic competition Availability of skilled personnel
Domestic economic conditions
Domestic economic conditions
5 Employee and benefits costs
Employee and benefits costs Domestic competition Domestic competition Domestic competition
6 Stagnant/declining markets
Stagnant/declining markets
Developing new products/services/markets
Changing customer preferences Staff Turnover
7 Domestic political leadership
Domestic political leadership
Domestic political leadership
Domestic political leadership
Developing new products/services/markets
8 Developing new products/services/markets Liquidity Changing customer
preferencesDeveloping new
products/services/marketsMaterials/supplies/
equipment costs
9 Liquidity Developing new products/services/markets
Stagnant/declining markets Staff Turnover Domestic political
leadership
10 Energy costs Financing (access/cost of capital) Staff Turnover Materials/supplies/
equipment costsChanging customer
preferences
2Q 2017 Economic Outlook Survey
Industry, Region and Business-size Outlook - 1 of 3
Optimism rebounds for retail
Optimism easesfor both manufacturing and technology
Construction and real estate alsogive up some Q1 gains
Retail trade optimism rebounded to 58% after dropping from 50% to 38% in Q1Wholesale trade however, gave back its significant jump to 79% optimistic in Q1, falling off to 57% in Q2
Hiring for retail continues to be soft, but recovered from <0.3%> in Q1 to 1.1% in Q2
Manufacturing hiring continued to improve from 2.1% in Q1 to 2.3% in Q2
Construction optimism dropped from 74% in Q1to 66% in Q2Real Estate and Property fell from 79% to 63%
Construction hiring also declined from 2.8% in Q1 to 1.7% in Q2Real Estate hiring expectations also softened a point from 1.5% to 1.4%
Manufacturing optimism eases to 66% in Q2 from 74% in Q1 Technology also declines from 69% to 56% optimistic in Q2
2Q 2017 Economic Outlook Survey
Industry, Region and Business-size Outlook - 2 of 3
Finance and Insurance and Professional Services also settle
Healthcare providers rebound; Healthcare –other declines in optimism
Finance and Insurance optimism declines from 74% in Q1 to 66% in Q2
Professional service optimism also declines from 66% in Q1 to 62% in Q2
Technology hiring improves from 2.0% in Q4 to 2.9% in Q1
Professional service hiring also gives back some Q1 strength, easing from 3.9% in Q1 to 2.9% in Q2
Healthcare providers jumped from 43% in Q1 to 52% in Q2
Healthcare – other dropped from 70% optimistic in Q1 to 60% in Q2
Expected hiring by Healthcare providers eases from 3.3% in Q1 to 2.4% in Q2
2Q 2017 Economic Outlook Survey
Industry, Region and Business-size Outlook - 3 of 3
Regional optimism shows mixed results
Employment projections by business size and expansion plans by size also show mixed results
South – optimism in South gives back its Q1 gains, falling from 71% to 65%Midwest – maintains its Q1 level of optimism in Q2 at 65%West – optimism declines from 68% in Q1 to 62% in Q2Northeast –improves from 57% to 60% optimistic
For employers with > $1 billion in revenues, 33% have too few employees. However, only 16% of the largest companies with too few employees have plans to hire; 17% are hesitant. Employers with revenues < $10 million are also mixed; while 39% have too few employees, only 19% are planning to hire; 20% are hesitant. In the $10 - $100 million range, 29% of the total of 42% with too few employees have plans to hire; only 13% are hesitant.Of those in the $100 million to $1 billion category, 45% say they have too few employees and 27% are hiring, while 18% are hesitant. While expansion plans for the larger category of SMEs increased from 67% to 73%, expansion plans for the smaller SME companies fell from 72% to 53%
2Q 2017 Economic Outlook Survey
Organization Optimism by Industry 1 of 3
85%
65%
28%39%
50%
33%
50%38%
58%
0%
20%
40%
60%
80%
100%
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Retail Trade
55% 53%
41%48% 48% 47%
55%
71%66%
0%
20%
40%
60%
80%
100%
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Manufacturing
60%67%
52% 53%61%
71% 67% 65%56%
0%
20%
40%
60%
80%
100%
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Technology
65%54%
23%
42%50% 45% 48%
79%
57%
0%
20%
40%
60%
80%
100%
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Wholesale Trade
2Q 2017 Economic Outlook Survey
Organization Optimism by Industry 2 of 3
64% 68%60%
46%
70% 67%
48%
66% 62%
0%
20%
40%
60%
80%
100%
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Professional Service
74%65%
49%41%
58% 57%66%
79%
64%
0%
20%
40%
60%
80%
100%
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Finance & Insurance
65% 69%
48% 52%62% 62%
69%79%
63%
0%
20%
40%
60%
80%
100%
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Real Estate
64% 64%
51%59% 59%
69%75% 74%
66%
0%
20%
40%
60%
80%
100%
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Construction
2Q 2017 Economic Outlook Survey
Organization Optimism by Industry 3 of 3
50%
67%
44%
67% 63%50%
80%70%
60%
0%
20%
40%
60%
80%
100%
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Health Care - Other
47%
69%
38%
52%
69% 68% 69%
43%52%
0%
20%
40%
60%
80%
100%
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Health Care Provider
Expected Employment Change by Industry
2Q 2017 Economic Outlook Survey
Thinking about the coming 12 months, please comment on the probable change for your organization for Number of Employees
1.1
1.4
1.7
1.8
1.9
2.2
2.3
2.3
2.4
2.5
2.9
3.2
-0.3
1.5
2.8
1.2
2.3
2.7
1.8
2.1
3.3
2.0
3.9
2.9
-1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
Retail Trade
Real Estate Property
Construction
Not for Profit
Trans & Distribution
Finance and Insurance
Banking
Manufacturing
Healthcare Provider
Mining
Professional Services
Technology
Q1 Q2
Organization Optimism by Region
2Q 2017 Economic Outlook Survey
Please select the rating that best describes your view for the economic outlook for your own organization for the next 12 months.2Q16 3Q16 4Q16 1Q17 2Q17
South 53% 48% 68% 71% 65%Midwest 53% 53% 62% 65% 65%West 54% 57% 59% 68% 62%Northeast 62% 58% 56% 57% 60%
0%10%20%30%40%50%60%70%80%90%
100%
Expansion Plans by Business Size
2Q 2017 Economic Outlook Survey
Please indicate whether you expect your business to expand or contract over the next 12 months
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17< $10 million 58% 50% 44% 52% 53% 56% 56% 56% 59% 59% 65% 59% 47% 61% 52% 44% 55% 53% 52% 61% 55%$10 to <$100 million 59% 58% 52% 58% 63% 61% 63% 62% 65% 69% 72% 63% 66% 62% 57% 59% 61% 65% 63% 72% 53%$100 million to <$1 billion 66% 56% 53% 63% 63% 64% 62% 71% 65% 73% 72% 67% 65% 60% 57% 50% 61% 59% 67% 67% 73%> $1 billion 62% 54% 53% 68% 68% 68% 64% 69% 66% 71% 75% 77% 53% 56% 59% 49% 50% 66% 62% 66% 69%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
53% of all businesses expect to expand a little in the next twelve months 11% expect to expand a lot 35% expect to contract a little or stay the same Only 1% expect to contract a lot
Businesses in the >$1 billion range are most likely to have excess employees
2Q 2017 Economic Outlook Survey
Given current conditions, how would you characterize your overall staffing situation relative to your needs (i.e., do you have excess capacity or are employees stretched)?
We have an excessnumber ofemployees
We haveapproximately the
appropriate numberof employees
We have too fewemployees, but arehesitating to hire
We have too fewemployees and are
planning to hireOther
< $10 million 9% 50% 20% 19% 2%$10 to <$100 million 7% 49% 13% 29% 3%$100 million to <$1 billion 7% 47% 18% 27% 1%> $1 billion 11% 54% 17% 16% 1%
9%
50%
20% 19%
2%
7%
49%
13%
29%
3%7%
47%
18%
27%
1%
11%
54%
17% 16%
1%
AICPA Economic Outlook Survey
Survey Within a Survey
Corporate Tax Reform
Tax Reform - Timing
2Q 2017 Economic Outlook Survey Within A Survey
Do you expect the administration’s proposal to lower federal corporate income taxes to 15% will be enacted this year?
Federal Corporate Income Taxes
7%
16%
33%
44%
0% 10% 20% 30% 40% 50%
Not sure
Yes
Eventually, but not until at least2018 before mid-term elections
No
2Q 2017
Tax Reform – Bottom Line Impact
2Q 2017 Economic Outlook Survey Within A Survey
What impact would a potential reduction in the federal corporate income tax rate to the 15% to 20% range have on your company’s bottom line?
Federal Corporate Income Taxes
1%
3%
15%
21%
24%
36%
2%
4%
15%
18%
18%
43%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Negative impact
Not sure
Slightly positive
Moderately positive
Significantly positive
Not a factor
1Q 20172Q 2017
Tax Reform – Savings Deployment
2Q 2017 Economic Outlook Survey Within A Survey
If federal corporate income taxes are reduced, what are the likeliest ways your company would deploy the tax savings? If federal corporate income taxes are reduced, what are the likeliest ways your company would deploy the tax savings?
Federal Corporate Income Taxes
3%
4%
12%
16%
18%
25%
28%
46%
3%
6%
11%
17%
17%
27%
31%
40%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Hire more part-time workers
Buy back stock
Acquire or merge with anothercompany
Issue or increase dividend
Hire more full-time workers
Pay down debt
Other (please specify)
Increase capital expenditures andbusiness expansion spending
1Q 20172Q 2017
Tax Reform – Company Prospects
2Q 2017 Economic Outlook Survey Within A Survey
How much would enactment of tax reform shape your view of your own company’s prospects?
Federal Corporate Income Taxes
1%
2%
16%
36%
45%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
It would make me substantially morenegative
It would make me more slightly morenegative
It would make me more substantially morepositive
It would make me slightly more positive
It would not change my outlook
Tax Reform – Economic Outlook
2Q 2017 Economic Outlook Survey Within A Survey
If tax reform fails to be implemented before the 2018 mid-term elections, what impact do you expect that will have on your outlook for the U.S. economy?
Federal Corporate Income Taxes
3%
6%
10%
39%
42%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
I would have a substantially morepositive outlook
It would make me slightly more positive
I would have a substantially morenegative outlook
I'd have a slightly more negative outlook
I'd have a neutral outlook
2Q 2017 Economic Outlook Survey
Applyaccountingand financeskills...
in the context of the business...
Demographics
Applyaccountingand financeskills...
in the context of the business...
20%
34%11%
12%
8%
4%11%
Size of Organization
$0 to under $10 million
$10 million to under $50 million
$50 million to under $100 million
$100 million to under $250 million
$250 million to under $500 million
$500 million to under $1 billion
$1 billion or more
14%
71%
1%14%
0%
Type of Organization
Publicly Listed Company
Privately Owned Entity
Government
Not for Profit
Other
10% 2%
8%
47%0%
22%
5%
2% 4%
Position
CEO/PresidentCOOVP/SVPCFOCAO/CAECIOControllerDirectorAccounting, Audit, Tax or Technology ManagerOther
AICPA Business and IndustryEconomic Outlook Survey 2Q 2017
For additional information contact:
Kenneth W. Witt, CPA, CGMALead Technical Manager Management [email protected]
Cary JonesAssociate Manager
Business, Industry & Government Team [email protected]