Industry Economic Outlook Survey Detailed Survey Results: 2Q 2019 - - PowerPoint PPT Presentation
Management Accounting AICPA Business and Industry Economic Outlook Survey Detailed Survey Results: 2Q 2019 Survey Background Conducted between May 7-28, 2019 Quarterly survey CPA decision makers primarily CFOs, CEOs and
Detailed Survey Results: 2Q 2019
Management Accounting
Survey Background
– primarily CFO’s, CEOs and Controllers
2 2Q 2019 Economic Outlook Survey
Survey Highlights
3
Overall index drops slightly to 75 Optimism, expansion, revenues and profits ease 1 to 3 points. Employment and spending plans flat with the exception of training which dropped 2 points. Expansion plans soften; employment plans hold flat Overall expansion plans decline from 66% to 63%. Employment plans hold flat, availability of skilled personnel and turnover remain significant challenges.
2Q 2019 Economic Outlook Survey
Percentage optimistic about U.S. Economy remains constant at 57% Global optimism recovers a point to 35%, but still significantly down from 71% first quarter 2018.
CPA Outlook Index (CPAOI)
4
The CPA Outlook Index is the composite of the following nine indicators at equal weights:
the next 12 months
months
The CPA Outlook Index is a robust measure of sentiment about the U.S. economy that is supported by the unique insight and knowledge that CEOs, CFOs, Controllers, and
have about the prospects for their own
expectations for revenues and profits, and their plans for spending and employment.
2Q 2019 Economic Outlook Survey
CPA Outlook Index (CPAOI)
5
A reading above 50 indicates a generally positive outlook with increasing activity. A reading below 50 indicates a generally negative outlook with decreasing activity.
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 CPA Outlook Index 72 75 78 74 72 71 69 63 68 69 74 76 75 77 79 81 79 79 76 76 75
72 75 78 74 72 71 69 63 68 69 74 76 75 77 79 81 79 79 76 76 75
2Q 2019 Economic Outlook Survey
6
CPA Outlook Index (CPAOI)
2Q 2019 Economic Outlook Survey
Component 2Q18 3Q18 4Q18 1Q19 2Q19 ∆Q to Q ∆Y to Y U.S. Economic Optimism 83 79 71 72 70 02 13 Organization Optimism 80 81 79 77 75 02 05 Expansion Plans 79 80 77 76 75 01 04 Revenue 83 85 83 82 81 01 02 Profits 77 79 77 75 72 03 05 Employment 75 76 73 71 71 ➔00 04 IT Spending 82 82 81 80 80 ➔00 02 Other Capital Spending 78 78 73 74 74 ➔00 04 Training & Development 77 75 74 75 73 02 04 Total CPAOI 79 79 76 76 75 01 05
7
CPA Outlook Index (CPAOI) vs. GDP
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 CPA Outlook Index 81 79 79 76 76 75 Change in GDP 2.2% 4.2% 3.4% 3.1% 2.2%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 10 20 30 40 50 60 70 80 90 100
GDP Growth CPA Outlook Index
2.2.%
2Q 2019 Economic Outlook Survey
U.S. Economy, Organization and Inflation
8
Optimism for U.S. economy consistent with Q1
Optimists cite continued overall economic strength, lower taxes and less regulatory burden. Pessimists cite impact of tariffs on purchasing and overall growth, slowing global demand and auto industry easing, along with high levels of national, corporate and personal debt.
Organization optimism eases 3 points
Optimism for respondent’s own
three points from 65% to 62%
Expansion plans ease from 66% having plans to 63%. The percentage of companies expecting their businesses to contract remained at 14%.
Concern about inflation dropped to 29%
Concern about labor costs continues to be most significant, moving 38% to 39% Raw materials cost concerns also gain 1 point to 29% Interest rate concerns decreased from 20% to 18%. Energy cost concerns remain constant at 7%
57% 62%
2Q 2019 Economic Outlook Survey
Optimism & Expansion
9
The economic
U.S. economy, your organization, and the expansion plans over the next 12 months
2Q1 Q16 3Q1 Q16 4Q1 Q16 1Q1 Q17 2Q1 Q17 3Q1 Q17 4Q1 Q17 1Q1 Q18 2Q1 Q18 3Q1 Q18 4Q1 Q18 1Q1 Q19 2Q1 Q19 U.S. 37% 37% 38% 38% 62% 62% 69% 69% 64% 64% 64% 64% 74% 74% 79% 79% 74% 74% 69% 69% 57% 57% 57% 57% 57% 57% Organiz nizatio tion 53% 53% 53% 53% 61% 61% 66% 66% 64% 64% 66% 66% 70% 70% 71% 71% 70% 70% 69% 69% 68% 68% 65% 65% 62% 62% Ex Expans nsion ion 58% 58% 62% 62% 62% 62% 67% 67% 64% 64% 65% 65% 71% 71% 72% 72% 70% 70% 70% 70% 67% 67% 66% 66% 63% 63%
0% 0% 10% 10% 20% 20% 30% 30% 40% 40% 50% 50% 60% 60% 70% 70% 80% 80% 90% 90% 100% 2Q 2019 Economic Outlook Survey
Inflation or Deflation
10
For your business, over the next 6 months, which are you more concerned about? Inflation
32% 38% 27% 23% 23% 25% 23% 14% 23% 11% 28% 33% 31% 26% 27% 49% 47% 47% 49% 34% 29% 6% 5% 10% 12% 10% 10% 11% 22% 12% 18% 4% 3% 5% 5% 5% 3% 2% 2% 2% 6% 5%
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Inflation Deflation
2Q 2019 Economic Outlook Survey
Inflationary Risk Factors
11
Which of the following potential inflationary factors represents the most significant risk to your business?
Food costs Energy costs Raw material costs Labor costs Interest rates Other 2Q18 2% 7% 31% 39% 18% 4% 3Q18 1% 6% 32% 36% 20% 5% 4Q18 3% 6% 28% 41% 19% 5% 1Q19 2% 7% 28% 38% 20% 5% 2Q19 3% 7% 29% 39% 18% 5%
2% 7% 31% 39% 18% 4% 1% 6% 32% 36% 20% 5% 3% 6% 28% 41% 19% 5% 2% 7% 28% 38% 20% 5% 3% 7% 29% 39% 18% 5%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
2Q 2019 Economic Outlook Survey
Key Performance Indicators
12
Revenues and Profits
Revenue and Profit projections both showing decreases
Expected revenue for coming twelve months decreased from 4.4% in Q1 to 4.2% in Q2 Profit projections also decreased from 3.6% in Q1 to 3.1%
Headcount plans constant; healthcare cost projections decline another tenth
Anticipated rate of headcount remained constant at 1.9% Salary and benefit expected cost increases a tenth to 2.7% Healthcare cost projections dropped another tenth to a new low of 5.1%
Spending Plans
Spending plans mixed
Expected rate for IT spending down from 3.5% to 3.4% Other capital spending up from 2.9% to 3.0% Expected rate of increase for training drops from 2.3% to 2.1% Marketing spending plans drop from 2.0% to 1.6% R&D spending plans drop four tenths from a 1.9% rate to 1.5%
2Q 2019 Economic Outlook Survey
Key Performance Indicators
13
Thinking about the coming 12 months, please comment on the probable change for your
each of the following key performance indicators
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Revenue 3.8% 4.4% 4.7% 3.6% 3.2% 3.3% 2.9% 1.7% 3.0% 2.9% 3.6% 4.3% 3.9% 4.3% 4.8% 5.0% 4.8% 5.0% 4.3% 4.4% 4.2% Profit 2.9% 3.6% 3.9% 2.8% 2.4% 2.6% 2.0% 0.7% 1.5% 2.3% 3.1% 3.5% 3.2% 3.5% 3.8% 4.4% 4.0% 4.3% 3.4% 3.6% 3.1%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
Expected Growth in Revenue and Profits
2Q 2019 Economic Outlook Survey
Key Performance Indicators
14
Thinking about the coming 12 months, please comment on the probable change for your
each of the following key performance indicators
Employees, Salary & Benefits, and Healthcare Costs
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Employees 1.3% 1.8% 2.1% 1.6% 1.5% 1.3% 1.0% 0.5% 1.1% 1.3% 1.6% 1.8% 1.8% 1.9% 1.8% 2.1% 2.1% 2.3% 2.0% 1.9% 1.9% Salary & Benefits 2.1% 2.4% 2.5% 2.0% 2.1% 2.0% 1.8% 1.4% 1.8% 2.1% 2.3% 2.3% 2.2% 2.4% 2.5% 2.7% 2.8% 2.8% 2.6% 2.6% 2.7% Healthcare 5.7% 6.6% 5.9% 5.8% 5.8% 5.8% 5.4% 5.4% 5.7% 5.6% 6.1% 5.6% 5.5% 6.3% 5.9% 5.6% 5.9% 5.7% 5.3% 5.2% 5.1%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 2Q 2019 Economic Outlook Survey
Key Performance Indicators
15
Thinking about the coming 12 months, please comment on the probable change for your
each of the following key performance indicators
Pricing & Other Costs Average Change Expected
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Prices Charged 1.8% 1.7% 1.7% 1.4% 1.4% 1.6% 1.5% 0.8% 1.3% 1.5% 1.8% 1.9% 1.9% 1.9% 2.1% 2.1% 2.5% 2.5% 2.2% 2.1% 2.2% Input Prices 2.4% 2.3% 2.1% 2.1% 2.0% 2.2% 2.1% 1.5% 2.1% 1.9% 2.4% 2.4% 2.5% 2.4% 2.5% 2.7% 3.2% 3.2% 3.0% 2.6% 2.6%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
2Q 2019 Economic Outlook Survey
Key Performance Indicators
16
Thinking about the coming 12 months, please comment on the probable change for your
each of the following key performance indicators
Spending Plans - IT, Other Capital & Training
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 IT 3.2% 3.1% 3.3% 3.3% 3.1% 3.1% 3.0% 2.8% 2.3% 2.6% 2.8% 2.9% 3.0% 3.2% 3.5% 3.6% 3.7% 3.7% 3.6% 3.3% 3.5% 3.4% Other Capital 2.3% 2.4% 2.9% 3.2% 2.4% 2.4% 2.5% 2.4% 1.5% 2.1% 2.4% 2.7% 2.6% 2.8% 3.3% 3.1% 3.9% 3.6% 3.5% 3.0% 2.9% 3.0% Training 1.7% 1.8% 2.0% 2.2% 1.6% 1.8% 1.4% 1.4% 1.1% 1.3% 1.6% 1.6% 1.8% 2.0% 2.1% 2.2% 2.4% 2.4% 2.3% 2.0% 2.3% 2.1%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 2Q 2019 Economic Outlook Survey
Key Performance Indicators
17
Thinking about the coming 12 months, please comment on the probable change for your
each of the following key performance indicators
Spending Plans Marketing & R&D
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Marketing 1.6% 1.6% 1.8% 1.6% 1.8% 1.6% 1.6% 1.4% 1.4% 1.4% 1.5% 1.9% 1.8% 1.8% 2.0% 2.1% 1.9% 1.9% 1.9% 2.0% 1.6% R&D 1.0% 1.2% 1.3% 1.3% 1.2% 1.7% 1.2% 0.9% 1.1% 1.1% 1.5% 1.7% 1.5% 2.0% 2.0% 2.0% 2.2% 2.0% 1.7% 1.9% 1.5%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 2Q 2019 Economic Outlook Survey
Hiring Plans
18
Have right number of employees Down one point from Q1 Have an excess of employees Down two points from Q1 Have too few, but hesitating to hire Up 1 point from Q1 Have too few and planning to hire Up 2 points from Q1
16% 47% 6% 28%
Remain relatively strong
2Q 2019 Economic Outlook Survey
Hiring Plans
19
Overall staff situation relative to your needs
Given current conditions, how would you characterize your overall staffing situation relative to your needs
(i.e., do you have excess capacity or are employees stretched)?
We have an excess number of employees We have approximately the appropriate number of employees We have too few employees, but are hesitating to hire We have too few employees and are planning to hire Other 2Q18 5% 48% 13% 30% 3% 3Q18 6% 46% 12% 32% 4% 4Q18 6% 50% 14% 28% 2% 1Q19 8% 48% 15% 26% 2% 2Q19 6% 47% 16% 28% 3%
5% 48% 13% 30% 3% 6% 46% 12% 32% 4% 6% 50% 14% 28% 2% 8% 48% 15% 26% 2% 6% 47% 16% 28% 3%
0% 10% 20% 30% 40% 50% 60%
2Q 2019 Economic Outlook Survey
Str Strategic Pla lanning Im Impact t - Ret etention
2Q 2019 Economic Outlook Survey
With the tight labor market, what tactics are you planning to use -- if any -- to help retention and recruitment
12 months?
9% 12% 12% 19% 48%
0% 20% 40% 60%
Other Additional time off One-time bonus Improved benefits Salary/wage/commission increases
Retention and Recruitment
Str Strategic Pla lanning – Wage In Increases
2Q 2019 Economic Outlook Survey Within A Survey
Are you planning
salaries/wages for your employees and, if so, how much over the next 12 months?
6% 8% 18% 64% 4%
0% 10% 20% 30% 40% 50% 60% 70%
Not sure Not planning on raising salaries/wages Up to 2 percent 3 to 5 percent More than five percent 86%
Retention and Recruitment – “Other” Tactics
2Q 2019 Economic Outlook Survey Within A Survey
Com
and Benefit Related Tactics
Goal based incentive plans
Offer of
Retention bonuses Improved benefits Match competing
Focused incentive plans Additional time off Flexible work schedules Ability to work from home Work/life balance
Retention and Recruitment – “Other” Tac
2Q 2019 Economic Outlook Survey Within A Survey
Culture and Employee Engagement Tactics
Improve culture Improved focus on employee morale and engagement. Increased employee training and career development Improve recognition Hiring for cultural fit Greater focus on improving leadership for teams Support and value the employee Work place excellence Be an employer of choice
Top Challenges Facing Organizations
Indication of the top three challenges for your organization
24
Availability of skilled personnel continues as the top challenge Domestic competition and employee and benefit costs switch places again between the 2nd and 3rd spots Regulatory requirements maintains its ranking at #4 Staff turnover returned to 5th place after falling to 9th place in Q1 Domestic economic conditions maintained at #6, while domestic political leadership dropped from #5 to #8 Materials/supplies/equipment costs maintained the 7th spot Developing new products and services returned to the top 10, in the 9th place position Changing customer preferences dropped two spots, moving from the 8th to the 10th spot Financing (access/cost of capital) dropped out of the top 10 this quarter
2Q 2019 Economic Outlook Survey
Top Challenges
25 2Q 2019 Economic Outlook Survey
2Q18 3Q18 4Q18 1Q19 2Q19
1 Availability of skilled personnel Availability of skilled personnel Availability of skilled personnel Availability of skilled personnel Availability of skilled personnel 2 Regulatory requirements/changes Regulatory requirements/changes Employee and benefits costs Domestic competition Employee and benefits costs 3 Employee and benefits costs Domestic competition Domestic competition Employee and benefits costs Domestic competition 4 Domestic competition Employee and benefits costs Regulatory requirements/changes Regulatory requirements/changes Regulatory requirements/changes 5 Materials/supplies/ equipment costs Materials/supplies/ equipment costs Staff Turnover Domestic political leadership Staff Turnover 6 Domestic economic conditions Developing new products/services/markets Domestic economic conditions Domestic economic conditions Domestic economic conditions 7 Staff Turnover Staff Turnover Materials/supplies/ equipment costs Materials/supplies/ equipment costs Materials/supplies/ equipment costs 8 Changing customer preferences Domestic economic conditions Developing new products/services/markets Changing customer preferences Domestic political leadership 9 Developing new products/services/markets Domestic political leadership Changing customer preferences Staff Turnover Developing new products/services/markets 10 Domestic political leadership Financing (access/cost of capital) Financing (access/cost of capital) Financing (access/cost of capital) Changing customer preferences
Industry, Region and Business-size Outlook
26 2Q 2019 Economic Outlook Survey
Retail trade and Wholesale trade decline Manufacturing constant; Technology gains Construction and Real Estate improve
Reta Retail trade declines from 56% to 40%
Whole
Hiring for retail is expected to be flat, increasing at a rate of 1.2% for the coming twelve months. Manufacturing hiring expected to be relatively constant, improving a tenth from 1.8% to 1.9%. Technology hiring also eased from a 4.0% expected increase to 2.3% Con Constr tructi tion optimism jumped from 74% to 83% optimistic Rea Real Esta tate and d Pr Property ty improves from 64% to 67% optimistic Construction hiring continues to be strong at a 3.1% rate of increase. Real Estate hiring expectations improved from 1.3% in Q1 to 1.5%. Manufactu turing optimism remains constant at 57% optimistic Tech Technology gains 5 points from 65%
Industry, Region and Business-size Outlook
27 2Q 2019 Economic Outlook Survey
Finance & Insurance and Professional gains; Services hiring eases Healthcare providers and Healthcare –
improve
Fi Finance and d In Insurance optimism increased from 74% in Q1 to 77%
Professional Services gave back another 4 points from 65% optimistic to 61% Finance and insurance hiring, however, is also expected to improve from 2.5% to 2.7%. Professional services hiring improved from a rate of 2.2% in Q1 to 2.9% in Q2. Health thcare pr provider optimism increased from 51% to 63% in Q2 Health thcare – other optimism also improved slightly from 56%
Expected hiring by Healthcare providers jumped from 2.6% to 3.8%.
Organization Optimism by Industry
28 2Q 2019 Economic Outlook Survey
58% 52% 58% 66% 61% 61% 69% 56% 40%
0% 20% 40% 60% 80% 100%
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Retail Trade
66% 63% 72% 77% 75% 78% 67% 57% 57%
0% 20% 40% 60% 80% 100%
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Manufacturing
56% 64% 72% 80% 69% 60% 82% 65% 70%
0% 20% 40% 60% 80% 100%
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Technology
57% 81% 64% 72% 76% 63% 63% 89% 75%
0% 20% 40% 60% 80% 100%
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Wholesale Trade
Organization Optimism by Industry
29 2Q 2019 Economic Outlook Survey
63% 78% 75% 76% 78% 66% 75% 64% 67%
0% 20% 40% 60% 80% 100%
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Real Estate & Property
66% 70% 80% 77% 76% 69% 69% 74% 83%
0% 20% 40% 60% 80% 100%
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Construction
62% 50% 72% 78% 82% 84% 79% 65% 61%
0% 20% 40% 60% 80% 100%
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Professional Service
64% 65% 73% 79% 69% 78% 72% 74% 77%
0% 20% 40% 60% 80% 100%
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Finance & Insurance
Organization Optimism by Industry
30 2Q 2019 Economic Outlook Survey
60% 67% 79% 76% 88% 67% 65% 56% 57%
0% 20% 40% 60% 80% 100%
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Health Care - Other
52% 56% 65% 61% 44% 61% 60% 51% 63%
0% 20% 40% 60% 80% 100%
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Health Care Provider
Expected Employment Change by Industry
31 2Q 2019 Economic Outlook Survey
Thinking about the coming 12 months, please comment on the probable change for your
Number of Employees
1.2 1.8 2.1 1.3 1.9 1.8 1.5 4.0 2.5 2.2 3.1 2.6 1.2 1.2 1.3 1.5 1.6 1.9 2.3 2.3 2.7 2.9 3.1 3.8 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
Retail Trade Not for Profit Banking Real Estate Property Trans & Distribution Manufacturing Mining, Oil & Gas Technology Finance and Insurance Professional Services Construction Healthcare Provider Q2 Q1
Note: Q1 numbers have been revised
Industry, Region and Business-size Outlook
32 2Q 2019 Economic Outlook Survey
Regional
mixed results Employment projections by business size and expansion plans by size also reflecting level of optimism
Midwest – optimism dropped another 4% from Q1 to 60% West – optimism dropped 13% from Q1 level of 74% to 61% South – gained 5% to 72% Northeast – optimism gained 3% to 53%
For employers with > $1 billion in revenues, only 3% now have excess employees, while 52% have too few. Of those with too few employees, 25% remain hesitant while 27% are planning to hire. Of those in the $100 million to $1 billion category, 43% say they have too few employees; 28% are hiring; while 15% are hesitant. In the $10 - $100 million range, 46% now have too few employees; of those with too few, 32% have plans to hire; only 14% are hesitant Of employers with revenues < $10 million 40% have too few employees, down 7% from Q1; 26% are planning to hire; 14% are hesitant. Expectations for expansion by businesses with revenues < $10 million gained 3 points to 63%. Plans for companies in the $10 - $100 million category eased 1 point to 66%. Companies in the $100 million to $1 billion range eased to 63% from 67%; those with revenues in excess of $1 billion fell another 2 points from 66% to 64%.
Organization Optimism by Region
33 2Q 2019 Economic Outlook Survey
The rating that best describes your view for the economic outlook for your own
the next 12 months.
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Midwest 71% 70% 73% 73% 64% 60% West 75% 68% 65% 65% 74% 61% South 72% 74% 69% 71% 67% 72% Northeast 65% 59% 69% 64% 50% 53%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Expansion Plans by Business Size
34 2Q 2019 Economic Outlook Survey
Indicate whether you expect your business to expand or contract over the next 12 months
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 < $10 million 55% 61% 63% 67% 62% 63% 64% 60% 63% $10 to <$100 million 53% 58% 70% 74% 69% 70% 70% 67% 66% $100 million to <$1 billion 73% 68% 78% 72% 71% 73% 62% 67% 63% > $1 billion 69% 65% 75% 76% 78% 74% 71% 66% 64% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
50% of all businesses expect to expand a little in the next twelve months 14% expect to expand a lot 35% expect to contract a little or stay the same Less than 2% expect to contract a lot
Businesses in the > $1 billion range are most hesitant to hire
35 2Q 2019 Economic Outlook Survey
Given current conditions, how would you characterize your overall staffing situation relative to your needs
(i.e., do you have excess capacity or are employees stretched)?
We have an excess number of employees We have approximately the appropriate number of employees We have too few employees, but are hesitating to hire We have too few employees and are planning to hire Other < $10 million 5% 51% 14% 26% 4% $10 to <$100 million 7% 46% 14% 32% 1% $100 million to <$1 billion 8% 46% 15% 28% 5% > $1 billion 3% 43% 25% 27% 1%
5% 51% 14% 26% 4% 7% 46% 14% 32% 1% 8% 46% 15% 28% 5% 3% 43% 25% 27% 1%
0% 10% 20% 30% 40% 50% 60%
The following results were compiled from the responses of the 404 executives that indicated they had financial instruments on their balance sheets.
Financia ial l Instruments – Ba Bala lance Sheet Co Compositio ion
2Q 2019 Economic Outlook Survey Within A Survey
Thinking ab about the the fi financial ins nstruments on n yo your company's 's ba balance she sheet ove ver the the pas past 1-3 ye years would yo you say say they they hav have...
3% 10% 58% 25% 4%
0% 10% 20% 30% 40% 50% 60% 70%
Decreased Substantially Decreased Slightly No Change Increased slightly Increased Substantially
Fin inancial In Instruments – Exp xpected Change
2Q 2019 Economic Outlook Survey Within A Survey
Thinking about chan changes to to you your co company's 's bal balance she sheet ove
the next next 1- 3 3 yea years, , wo would you you say say th that at fi financial ins nstruments wi will be. be...
2% 13% 57% 26% 2%
0% 20% 40% 60%
Substantially smaller percentage
Slightly smaller percentage of the balance sheet No change A slightly larger percentage of the balance sheet A substantially larger percentage
Financia ial l Instruments – Rep eportin ing Tra ransparency
2Q 2019 Economic Outlook Survey Within A Survey
Yo Your tak take on n the the fo following: "It "It would be be eas asier fo for r my my company to to dete termine the the val value
f fi financial ins nstruments on n our ur ba balance she sheet if f the they were re me measured and and rep reported on n in a a cons nsistent and and tra transparent manner"
1% 2% 41% 42% 14%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree
2Q 2019 Economic Outlook Survey Within A Survey
Th Thinking about pote potential chan changes es to to th the co complexity
financial ins nstruments ove
th the nex next 1-3 ye years, , wou
you say say the they wi will...
1% 29% 57% 12%
0% 10% 20% 30% 40% 50% 60%
Become slightly less complex No change Become slightly more complex Become substantially more complex
2Q 2019 Economic Outlook Survey Within A Survey
Som Some analysts hav have ex expressed ed co conc ncern about curr current val aluations
some e fo form rms of
de deriv rivatives and har ard-to to-value ass
Do you you hav ave co conc ncerns about th thes ese ki kinds
financial ins nstruments and, , if f so so, to to wh what at de degr gree?
9% 37% 22% 27% 6%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Not sure No concern Moderate concern Slight concern Significant concern
55%
2Q 2019 Economic Outlook Survey Within A Survey
Do Do yo you th think the there is s eno nough ma market aw awareness reg regarding complex fin financial ins nstruments to to pre prevent the the ki kind of f fin financial meltdown th that occurred from from pro problematic mo mortgage-backed se securities prio prior to to the the Gre Great Re Recession?
Not sure 25% No 53% Yes 22%
Not sure No Yes
Demographics
43 2Q 2019 Economic Outlook Survey
17% 30% 14% 13% 7% 6% 13%
Size of Organization
$0 to under $10 million $10 million to under $50 million $50 million to under $100 million $100 million to under $250 million $250 million to under $500 million $500 million to under $1 billion $1 billion or more
16% 64% 2% 16% 2%
Type of Organization
Publicly Listed Company Privately Owned Entity Government Not for Profit Other
5% 7% 4% 44% 2% 20% 8% 5% 3%
Position
President Vice President/SVP CEO/COO CFO Chief Officers (CAO/CAE/CIO/CTO/CRO/KMO) Controller/Comptroller Director/Managing Director Accounting, Audit, Tax or Technology Manager Other
For additional information contact:
Kenneth W. Witt, CPA, CGMA Lead Manager Research & Member Engagement - Americas Ken.Witt@aicpa-cima.com Cary Jones Associate Manager Business, Industry & Government Cary.Jones@aicpa-cima.com