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Home > Business > Trade Conflicts and Rising Interest Rates Weigh on Business Executives’ View of U.S. Economy, AICPA Survey Finds

Trade Conflicts and Rising Interest Rates Weigh on Business Executives’ View of U.S. Economy, AICPA Survey Finds

Published by Gbaf News

Posted on September 7, 2018

7 min read

Last updated: January 21, 2026

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Almost half of respondents say they would see an unfavorable impact on their business from tougher trade policies by U.S.
Availability of skilled personnel is still top business challenge
Revenue and profit expectations bounce back

For the second quarter in a row, business executives are reining in their optimism about the U.S. economy, in part because of the potential impact of trade and tariff policies and rising interest rates, according to the third-quarter AICPA Economic Outlook Survey, which polls chief executive officers, chief financial officers, controllers and other certified public accountants in U.S. companies who hold executive and senior management accounting roles.

Sixty-nine percent of business executives said they were optimistic about the economy over the next 12 months, a drop of five percentage points from last quarter and 10 percentage points from the start of the year. Optimism about their own company’s outlook slipped a percentage point to 69 percent. Both rates remain strong, however, from a historical perspective.

Expectations for profit and revenue growth over the next 12 months bounced back after a dip last quarter. Profit growth estimates rose to 4.3 percent from four percent last quarter, while revenue growth expectations grew from 4.8 percent to five percent.

“It’s unusual to see a decrease in U.S. economic optimism when key performance indicators such as profit and revenue are perceived to be on the rise,” said Arleen R. Thomas, CPA, CGMA, managing director of Americas Market, Global Offerings & CGMA Exam, Management Accounting for the Association of International Certified Professional Accountants. “On the one hand, business executives are encouraged by the impact of federal tax reform and reduced regulation at home, but there is some concern about trade wars, interest rate hikes and other factors that could contribute to a global economic slowdown.”

“Availability of skilled personnel” remains the No. 1 challenge for businesses for the fifth quarter in a row, the survey found. Overall, 46 percent of business executives said their companies currently have the right number of employees. Of the 44 percent who have too few employees, only 12 percent said they were reluctant to hire, a post-recession low, while 32 percent said they planned to hire immediately, a post-recession high.

The AICPA survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months. In comparison, the U.S. Department of Labor’s August employment report, scheduled for release tomorrow, looks back on the previous month’s hiring trends.

The CPA Outlook Index—a comprehensive gauge of executive sentiment within the AICPA survey— remained unchanged from last quarter at 79. The index is a composite of nine, equally weighted survey measures set on a scale of 0 to 100, with 50 considered neutral and greater numbers signifying positive sentiment. The biggest shift in index components this quarter was in U.S. economic optimism, which fell four points.

Other key findings of the survey:

Forty-nine percent of business executives said the likely impact of increased tariffs and tougher trade policies by the United States would be unfavorable for their business, while four percent said it would be favorable. Forty-four percent said it would have a neutral or minimal impact. A similar number – 48 percent – said increased tariffs and trade quotas from U.S. trading partners would be unfavorable for their business. The survey concluded a few days before the United States announced a bilateral trade pact with Mexico.
Sixty-eight percent of respondents said they viewed the predicted impact of the Tax Cuts and Jobs Act on their business for the upcoming twelve months as favorable, with 23 percent saying their outlook had become more favorable since the start of the year. Fifty-seven percent of survey respondents said interest rate hikes would have an unfavorable impact on their business over the next 12 months, while 14 percent said it would be favorable. Twenty-nine percent held a neutral view.
The percentage of business executives who expect their company to expand in the coming year remained unchanged from last quarter at 70 percent.
After availability of skilled personnel, the No. 2 and No. 3 challenges for businesses were “regulatory requirements and changes” and “domestic competition,” respectively.

Almost half of respondents say they would see an unfavorable impact on their business from tougher trade policies by U.S.
Availability of skilled personnel is still top business challenge
Revenue and profit expectations bounce back

For the second quarter in a row, business executives are reining in their optimism about the U.S. economy, in part because of the potential impact of trade and tariff policies and rising interest rates, according to the third-quarter AICPA Economic Outlook Survey, which polls chief executive officers, chief financial officers, controllers and other certified public accountants in U.S. companies who hold executive and senior management accounting roles.

Sixty-nine percent of business executives said they were optimistic about the economy over the next 12 months, a drop of five percentage points from last quarter and 10 percentage points from the start of the year. Optimism about their own company’s outlook slipped a percentage point to 69 percent. Both rates remain strong, however, from a historical perspective.

Expectations for profit and revenue growth over the next 12 months bounced back after a dip last quarter. Profit growth estimates rose to 4.3 percent from four percent last quarter, while revenue growth expectations grew from 4.8 percent to five percent.

“It’s unusual to see a decrease in U.S. economic optimism when key performance indicators such as profit and revenue are perceived to be on the rise,” said Arleen R. Thomas, CPA, CGMA, managing director of Americas Market, Global Offerings & CGMA Exam, Management Accounting for the Association of International Certified Professional Accountants. “On the one hand, business executives are encouraged by the impact of federal tax reform and reduced regulation at home, but there is some concern about trade wars, interest rate hikes and other factors that could contribute to a global economic slowdown.”

“Availability of skilled personnel” remains the No. 1 challenge for businesses for the fifth quarter in a row, the survey found. Overall, 46 percent of business executives said their companies currently have the right number of employees. Of the 44 percent who have too few employees, only 12 percent said they were reluctant to hire, a post-recession low, while 32 percent said they planned to hire immediately, a post-recession high.

The AICPA survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months. In comparison, the U.S. Department of Labor’s August employment report, scheduled for release tomorrow, looks back on the previous month’s hiring trends.

The CPA Outlook Index—a comprehensive gauge of executive sentiment within the AICPA survey— remained unchanged from last quarter at 79. The index is a composite of nine, equally weighted survey measures set on a scale of 0 to 100, with 50 considered neutral and greater numbers signifying positive sentiment. The biggest shift in index components this quarter was in U.S. economic optimism, which fell four points.

Other key findings of the survey:

Forty-nine percent of business executives said the likely impact of increased tariffs and tougher trade policies by the United States would be unfavorable for their business, while four percent said it would be favorable. Forty-four percent said it would have a neutral or minimal impact. A similar number – 48 percent – said increased tariffs and trade quotas from U.S. trading partners would be unfavorable for their business. The survey concluded a few days before the United States announced a bilateral trade pact with Mexico.
Sixty-eight percent of respondents said they viewed the predicted impact of the Tax Cuts and Jobs Act on their business for the upcoming twelve months as favorable, with 23 percent saying their outlook had become more favorable since the start of the year. Fifty-seven percent of survey respondents said interest rate hikes would have an unfavorable impact on their business over the next 12 months, while 14 percent said it would be favorable. Twenty-nine percent held a neutral view.
The percentage of business executives who expect their company to expand in the coming year remained unchanged from last quarter at 70 percent.
After availability of skilled personnel, the No. 2 and No. 3 challenges for businesses were “regulatory requirements and changes” and “domestic competition,” respectively.