Business executives’ optimism about the global economy has fallen sharply over the past year, reflecting concerns over trade conflicts, according to the American Institute of CPAs.

In its Business and Industry Economic Outlook Survey for the first quarter, AICPA found that 34% of respondents were optimistic about prospects for the global economy over the next 12 months, compared to 40% last quarter and 71% a year ago.

Optimism about the U.S. economy has fallen from 79% to 57% over the past year but was unchanged from the fourth quarter of 2018.

“Trade tensions, the cooling economy in China, the looming overhang of Brexit on the United Kingdom and European Union, a series of regional conflicts — all of these have contributed to a sense of uncertainty and pessimism about the global economy,” managing director of CGMA learning, education, and development for AICPA said in a news release.

Survey respondents’ expectations for profit and revenue growth over the next 12 months edged back up after a sharp drop last quarter, with profit growth estimates increasing to 3.6% from 3.4% and revenue growth expectations rising to 4.4% from 4.3%.

But both profit and revenue growth forecasts are well below those from a year ago.

“Every conversation I’ve had hasn’t been are we going to have a recession, but when is it going to hit,” Joselin Martin, CFO at plasterwork contractor Hayles & Howe, told The Wall Street Journal.

She added that recession worries have been compounded by uncertainty over U.S. trade policy, rising labor costs and the availability of skilled employees — all of which make it difficult for leaders to make strategic decisions about the future.

In the AICPA survey, labor costs remain the biggest concern for respondents among potential inflationary factors. Thirty-eight percent of respondents said labor costs posed the most significant risk to their business, unchanged from a year ago but down from 41% in the last quarter.

Other top concerns for executives include employee and benefit costs and regulatory requirements.

AICPA’s outlook index for U.S. economic optimism has declined from 86 to 72 over the past year.

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