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Business Executives Exhibit Cautious Optimism Amid Economic Challenges in U.S.

According to the latest AICPA and CIMA Economic Outlook Survey, business executives have reported a modest improvement in their perception of the U.S. economy, despite persistent concerns regarding inflation and tariffs. The survey polls CEOs, CFOs, controllers, and other senior management figures within U.S. companies that handle executive and accounting roles.

For the third quarter of 2025, optimism about the economy has risen, with 34% of respondents expressing confidence in the economic outlook for the next year, a slight increase from the 27% reported last quarter. While this figure signifies an improvement, it remains significantly lower than the post-election peak of 67% recorded in the fourth quarter of the previous year, although it is a notable increase from the 26% registered a year ago.

The ongoing uncertainty surrounding inflation and shifting tariff regulations continues to affect executives’ sentiments. A majority, 54%, predict a potential recession within this or the next year, an improvement from the 61% who held this view in the previous quarter. Additionally, inflation has overtaken domestic economic conditions as the primary concern among the surveyed executives.

Despite a reduction from 67% last quarter, more than half (58%) of business leaders report significant uncertainty in their business planning due to the changing nature of tariff schedules. Their companies are reacting in several ways:

• - 30% are raising prices.
• - 24% are looking to reduce operating costs.
• - 23% are exploring alternative supply chain options.

Tom Hood, CPA, CGMA, CITP, the executive vice president of business engagement and growth at the Association of International Certified Professional Accountants, indicated that there are some positive developments in play, such as pro-business measures in the recently passed H.R. 1 and more favorable regulatory policies from the current administration. However, the ongoing volatility in trade policy is posing significant planning challenges. The repercussions of tariff changes are still unfolding, and the upcoming quarter could be crucial in shaping overall economic sentiment.

The AICPA survey serves as a forward-looking gauge of hiring and business expectations for the coming year. This contrasts with the U.S. Department of Labor's employment report slated for release tomorrow, which reflects past hiring trends.

Some other noteworthy findings from the survey include:

• - Overall hiring considerations remain stable, with 16% of executives indicating that they are planning to hire new employees immediately, marking a two percentage point increase from the last quarter. Meanwhile, 14% report having excess personnel, up from 12% in the previous survey.
• - There has been a slight rebound in profit and revenue expectations as well. Projected revenue growth over the next year is forecasted at 1.5%, the same as a year ago and up 0.5 percentage point compared to last quarter. After experiencing negative expectations last quarter, anticipated profit margins are now expected to exceed break-even by a mere 0.1%.
• - 37% of executives responded favorably about their organizational prospects for the coming year, maintaining the same outlook as the previous quarter but down four percentage points from the prior year.
• - The percentage of survey participants expecting business expansion over the next year rose by three percentage points to 46%, compared to the last quarter.

Addressing the major issues facing businesses, inflation, domestic economic conditions, employee costs, materials, and domestic political leadership consistently top the list. The alarming trend of stagnating or declining markets has escalated to 7th place on the priority list.

The third-quarter AICPA and CIMA Economic Outlook Survey was conducted from August 5 to August 26, 2025, capturing 275 qualified responses from CPAs and Chartered Global Management Accountant (CGMA) holders in leadership roles, including CFOs and controllers. A complete copy of the report can be found at aicpa-cima.com.

The Association of International Certified Professional Accountants (the Association) works to enhance the reputation and employability of CPAs, CGMAs, and other financial professionals globally. Established through a partnership between AICPA and CIMA in 2017, it represents 580,000 members and advocates for public interest and business sustainability regarding current and emerging economic issues.