Some Good News For A Change: Executive Optimism Hits Three-Year High
Business executives’ optimism about the U.S. economy has reached its highest level in three years, fueled by government relief funds, vaccine rollouts, and relaxed workplace restrictions.
In its Economic Outlook Survey for the second quarter, the Association of International Certified Professional Accountants said 70% of respondents expressed optimism about economic prospects over the next 12 months, up 23 percentage points from the previous quarter.
It’s the first time a majority of executives have felt positive about the economy since the coronavirus pandemic began in the first quarter of 2020 and the highest level of optimism since the second quarter of 2018.
We’re seeing is a broad expectation that things will really open up in the second half of the year.
Many issues remain, of course. Supply chains are still straining to meet demand in a number of sectors. The global response to the pandemic still contains many uncertainties, which impacts the United States. But we are clearly seeing growing confidence on the part of business executives that the worst is behind us.
Profits are expected to grow by 4% in the next 12 months, more than doubling last quarter’s 1.9% forecast, while revenues are expected to climb 5%, up from 3%. Both projections are at their highest level since 2018.
The hiring outlook is also continuing to improve, with 33% of executives saying their companies planned to fill positions immediately, up from 19% last quarter.
Many economists predict inflation will surpass 2% this year but Federal Reserve officials believe any increase will be mild and temporary.