Inflation worries, a tight labor market and global fallout from the Russo-Ukraine war have dropped business executives’ view of U.S. economic prospects to its lowest level since 2011, according to the second-quarter AICPA Economic Outlook Survey. The survey 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.

Only 18% of business executives expressed optimism about the U.S. economy’s outlook over the next 12 months, down from 36% last quarter. That’s less than during the initial shock of the COVID-19 pandemic two years ago (20% optimism) and the lowest it’s been since the third quarter of 2011, when it stood at nine percent.

Some 97% of survey respondents said there was at least some risk of recession within the next 12 months, with one-in-four calling it a significant possibility. The 12-month outlook for the global economy also fell, with only 12% of business executives expressing optimism, down six percentage points from last quarter. This is the first survey installment to reflect the impact of war in the Ukraine.

View on Risk of Recession Within Next 12 Months

  • Significant risk: 25%
  • Moderate risk: 48%
  • Slight risk: 24%
  • No risk: 2%
  • Not sure: 2%

Inflation was the top concern of business executives for the third straight quarter, with labor costs seen as the main driver. Salary and benefit costs are now expected to increase at a rate of 4.4%, higher than at any time since before the Great Recession. Energy costs and interest rate hikes are also rising contributors to inflationary pressures, executives say.

“We’re still seeing residual stresses on supply chains from the pandemic and that’s now been coupled with the impact of sanctions and business wind-downs involving Russia,” Tom Hood, CPA, CITP, CGMA, executive vice president of business engagement and growth for the Association of International Certified Professional Accountants, representing the AICPA and CIMA, said. “Those global dislocations, a volatile pricing and cost environment, and the continuing impact of workplace shifts such as the Great Resignation are putting a lot of pressure on businesses and their finance teams.”

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 May employment report looks back on the previous month’s hiring trends.

The CPA Outlook Index — a comprehensive gauge of executive sentiment within the AICPA survey — fell to 67, down six points from last quarter. The index is a composite of nine, equally weighted survey measures set on a scale of 0 to 100, with 50 considered neutral and higher numbers signifying positive sentiment.

Other key findings of the survey:

Most business executives are now pessimistic about their own organization’s prospects over the next 12 months. Optimism levels in this area fell from 58% to 47%, quarter over quarter.

On hiring, 40% of business executives said their organizations are looking to fill roles immediately, while another 16% said they had too few employees but are hesitant to hire. Expected headcount growth over the next 12 months fell from 2.7% to 2.2%, quarter over quarter.

The number of business executives who said their companies plan to expand over the next 12 months fell from 62% last quarter to 53%.

Revenue growth projections for the next 12 months fell to 3.4% from 4.5% last quarter. Profit expectations dropped to 0.7%, the lowest level since the end of 2020.

Inflation was the No.1 challenge cited by business executives, but pricing and input cost pressures are also reflected in the No. 2 category, “Materials/Supplies/Equipment Costs.”

The second-quarter AICPA Business and Industry Economic Outlook Survey was conducted from April 26 to May 20 and included 549 qualified responses from CPAs who hold leadership positions, such as chief financial officer or controller, in their companies. The overall margin of error is less than 3 percentage points. A copy of the report can be found on