A majority of business executives expect a negative impact to their organizations if Congress does not pass another round of economic stimulus by early 2021 though optimism about the economy is increasing, according to the Association of International Certified Professional Accountants.
In its Economic Outlook Survey for the fourth quarter, AICPA said 54% of respondents expect a negative impact in the absence of further coronavirus-related aid, with 8% expecting a significant impact. Just over a third see no impact.
Twenty-three percent of business executives said stimulus would have to come in the next month or two to be effective.
But amid the current surge in COVID-19 cases, 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 rose from 41% to 49%.
The CPA Outlook Index moved further into positive territory, climbing to 62 from 54 last quarter.
“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, managing director of CGMA learning, education and development for AICPA, said in a news release.
“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,” he added.
Executives’ profit and revenue expectations are no longer showing contraction. Revenue is now projected to increase at a rate of 1.2% over the coming year, up from a projected decline of 0.6% in the third quarter. Profits are projected to be positive 0.2%.
Approximately 55% of business executives say their companies have returned to, or exceeded, pre-pandemic staffing levels and 17% said their companies planned to hire immediately, up from 13% in Q3.
But some 14% of companies don’t expect to get back to pre-pandemic staffing levels for several years.