Business executives hold their dimmest view of the U.S. economy in three years, due in part to widespread concerns about trade and fears of a sustained global slowdown, according to the third-quarter AICPA Economic Outlook Survey.

The survey found almost 42% of business executives expressed optimism about the U.S. economy’s outlook over the next 12 months, down from 57%, the level it held for the past three quarters. Positive sentiment on the U.S. economy had been as high as 79% in early 2018 and had not fallen below 50% since the third quarter of 2016, when it stood at 38%.

The CPA Outlook Index, which is a broad-based indicator of the strength of U.S. business activity and economic direction, showed declines in expectations for every category year-over-year, including revenue growth prospects, profit, training and development, expansion plans and employment.

The global economy was viewed in an even worse light, with less than a quarter (24%) of executives expressing optimism, down from 35% last quarter.

“Global trade tensions have been an issue for some time now, but it’s clear business executives are more concerned about growing volatility and risk in this area,” explained Bob Sannerud, CPA, CGMA, and chairman of the AICPA Regional Advisory Panel and CFO of Life Link, an emergency transport company.

“We’re seeing that uncertainty weighing on spending and hiring plans over the past few quarters,” Sannerud added.

The survey was conducted during a period of intense uncertainty over U.S.-China trade and tariff conflicts and the resolution of Brexit.

About 45% of business executives blamed trade conflicts for some negative impact on their business during the past 12 months, with 16% saying it had a significant or moderate impact.

The executives added that they expect things to get worse, with 54% saying they had an unfavorable view of global trade impacts on their business over the next 12 months, as compared to the past year.

Business executives are generally more positive about the outlooks of their own companies and expansion plans than the U.S. and global economics in general, but these categories have also fallen to levels not seen since late 2016.

Availability of skilled personnel remains the top challenge for business, a position that it has occupied since the third quarter of 2017.The number of survey respondents who said that their companies had too few employees dropped from 44% to 38% this quarter, while those who said that they had too many employees rose slightly. Some 51% of respondents said their businesses had the right number of employees.

MARK RALSTON/AFP/Getty Images

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