AICPA Business and Industry Economic Outlook Survey
Detailed Survey Results: 3Q 2020Management Accounting & Finance
Survey Background
• Conducted between July 28-August 18, 2020
• Quarterly survey
• CPA decision makers
– primarily CFO’s, CEOs and Controllers
• AICPA members in Business & Industry
• 1,067 qualified responses
3Q 2020 Economic Outlook Survey
Survey Highlights
3 3Q 2020 Economic Outlook Survey
Overall Index improves from 38 to a level of 54
▪ US Economy optimism up from 29 to 37
▪ All components up including US Economic and Organization Optimism
▪ Expansion plans, revenue and profit expectations all trending upward
CPAOI
Optimism about the economy, organization prospects and expansion plans rebound
Economy
and
Organization
Expansion plans rebound from only 24% to now 43% having plans to expand
Overall levels of employment are now expected to be flat, but key sectors are expected to
improve, and hiring plans for all sizes of business rebounded from Q2 levels
Domestic economic conditions continued as the top challenge, followed by domestic
political leadership which jumped four spots to the #2 position
Expansion
Employment
Challenges
▪ U.S. Economy rebounds from 20% in Q2 to 24% in Q3
▪ Organization optimism rebounds 11 points to 41%.
▪ Global economy outlook also improves slightly from 11% to 17% optimistic
CPA Outlook Index (CPAOI)
4 3Q 2020 Economic Outlook Survey
The CPA Outlook Index is the composite of the
following nine indicators at equal weights:
• U.S. Economy Optimism - Respondent optimism about the U.S. economy
• Organization Optimism - Respondent optimism about prospects for their own
organization
• Expansion Plans - Respondent expectations of whether their business will expand
over the next 12 months
• Revenue - Expectations for increases or decreases in revenue over the next 12
months
• Profits - Expectations for increases or decreases in profits over the next 12 months
• Employment - Expectations for increases or decreases in headcount over the next
12 months
• IT Spending - Plans for IT spending over the next 12 months
• Other Capital Spending - Plans for capital spending over the next 12 months
• Training & Development - Plans for spending on employee training and development
over the next 12 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
other CPA executives
have about the prospects
for their own
organizations, their
expectations for revenues
and profits, and their plans
for spending and
employment.
CPA Outlook Index (CPAOI)
5 3Q 2020 Economic Outlook Survey
A reading above
50 indicates a
generally
positive outlook
with increasing
activity.
A reading below
50 indicates a
generally
negative outlook
with decreasing
activity. 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
CPA OutlookIndex
71 69 63 68 69 74 76 75 77 79 81 79 79 76 76 75 72 72 76 38 54
71 69
6368 69
74 76 75 77 79 81 79 7976 76 75
72 7276
38
54
6
CPA Outlook Index (CPAOI)
3Q 2020 Economic Outlook Survey
Component 3Q19 4Q19 1Q20 2Q20 3Q20 ∆Q to Q ∆Y to Y
U.S. Economic Optimism 60 64 74 29 37 08 23
Organization Optimism 72 73 78 46 58 12 14
Expansion Plans 72 71 75 33 54 21 18
Revenue 76 76 81 27 51 24 25
Profits 70 71 73 26 47 21 23
Employment 68 70 71 38 54 16 14
IT Spending 80 80 81 59 71 12 09
Other Capital Spending 74 71 74 43 56 13 18
Training & Development 72 72 73 45 56 11 16
Total CPAOI 72 72 76 38 54 16 18
7
CPA Outlook Index (CPAOI) vs. GDP
2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
CPA OutlookIndex
75 72 72 72 38 54
Changein GDP
2.0% 2.1% 2.1% -5.0% -32.9%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
0
10
20
30
40
50
60
70
80
90
100
GDP Growth
CPA Outlook Index
- 32.9 %
3Q 2020 Economic Outlook Survey
8 3Q 2020 Economic Outlook Survey
Optimism for U.S. economy gains 4 points
Pessimists obviously cite the COVID-19 disruption impact on the economy, consumer demand and
government spending
Optimists cite the possibility of pent-up demand and lower energy costs, along with resilience and
innovation
Organization optimism recovers 11 points from 30% in Q2 to 41% in Q3
Expansion plans rebound from only 24% of respondents having plans to expand their business in
Q2 to now 43% with plans to expand.
Of the balance, 23% expect to stay the same, 25% expect to contract a little, now only 9% expect to
contract a lot
U.S. Economy, Organization and Inflation
24%
41%
20%
Concern about inflation remained at 20%; concern about deflation dropped to11%
Concern about labor costs as most significant risk increased to 37%
Raw materials cost concerns ticked up to 36%.
Interest rate concerns eased from 13% to 12%.
Energy cost concerns remained constant at 6%
Food cost concerns as most significant eased from 12% in Q2 to 5% in Q3
9
Optimism & Expansion
The economic
outlook for the
U.S. economy,
your organization,
and the expansion
plans over the
next 12 months
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
U.S. 64% 74% 79% 74% 69% 57% 57% 57% 42% 50% 61% 20% 24%
Organization 66% 70% 71% 70% 69% 68% 65% 62% 58% 58% 66% 30% 41%
Expansion 65% 71% 72% 70% 70% 67% 66% 63% 61% 59% 64% 24% 43%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
3Q 2020 Economic Outlook Survey
10 3Q 2020 Economic Outlook Survey
Inflation or Deflation?
For your business, over the next 6 months, which are you more concerned about? Inflation or deflation?
26%27%
49%47% 47%
49%
34%
29%
23%
19% 17%20% 20%
5% 5%3% 2% 2% 2%
6% 5%
11%8%
7%
18%
11%
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q200%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Inflation Deflation
11 3Q 2020 Economic Outlook Survey
Inflationary Risk Factors
Which of the following potential inflationary factors represents the most significant risk to your business?
Food costsEnergycosts
Raw materialcosts
Labor costsInterestrates
Other
3Q19 2% 5% 32% 37% 20% 4%
4Q19 3% 5% 26% 47% 13% 7%
1Q20 1% 6% 26% 46% 12% 9%
2Q20 12% 6% 28% 29% 13% 12%
3Q20 5% 6% 36% 37% 12% 5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Key Performance Indicator Summary
12
Revenues and Profits Revenue and profit improve but still expected to decline
Expected revenue for coming twelve months improve from an expected decrease of -5.0% in Q2 to an expected decrease on only 0.6% going forward from Q3
Profit projections also improved from -5.5% in Q2 to -1.2% in Q3
Hiring and Employment Headcount plans also show some recovery
Anticipated rate of headcount change improved from -1.1% in Q2 to 0.0% in Q3
Salary and benefit expected costs are now expected to increase at a rate of 0.9% going forward from Q3 rather than the expected Q2 decrease of -0.7%
Healthcare costs are now expected to increase at a rate of 4.3%, up from an expected rate of increase of 3.5% in Q2
Spending PlansSpending plans improve
Expected rate of increase for IT spending improves to 1.9%, up from only 0.4%
Other capital spending now projected to increase by 0.1%, up from -2.0% expected in Q2
Training spend now expected to decline by only -0.2%, which us up from -1.7% last quarter
Marketing spending cuts ease from -2.4% to -0.5%
R&D spending plans turn positive from -1.6% to 0.1%
3Q 2020 Economic Outlook Survey
13 3Q 2020 Economic Outlook Survey
Key Performance Indicators
Thinking about
the coming 12
months, please
comment on the
probable
change for your
organization for
each of the
following key
performance
indicators
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Revenue 2.9% 3.6% 4.3% 3.9% 4.3% 4.8% 5.0% 4.8% 5.0% 4.3% 4.4% 4.2% 3.5% 3.4% 4.3% -5.0% -0.6%
Profit 2.3% 3.1% 3.5% 3.2% 3.5% 3.8% 4.4% 4.0% 4.3% 3.4% 3.6% 3.1% 2.8% 2.7% 3.3% -5.5% -1.2%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Expected Growth in Revenue and Profits
14 3Q 2020 Economic Outlook Survey
Key Performance Indicators
Thinking about
the coming 12
months, please
comment on
the probable
change for your
organization for
each of the
following key
performance
indicators
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Employees 1.3% 1.6% 1.8% 1.8% 1.9% 1.8% 2.1% 2.1% 2.3% 2.0% 1.9% 1.9% 1.7% 1.6% 2.0% -1.1% 0.0%
Salary &Benefits
2.1% 2.3% 2.3% 2.2% 2.4% 2.5% 2.7% 2.8% 2.8% 2.6% 2.6% 2.7% 2.4% 2.5% 2.6% -0.7% 0.9%
Healthcare 5.6% 6.1% 5.6% 5.5% 6.3% 5.9% 5.6% 5.9% 5.7% 5.3% 5.2% 5.1% 5.1% 5.2% 5.1% 3.5% 4.3%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Employees, Salary & Benefits, and Healthcare Costs
15 3Q 2020 Economic Outlook Survey
Key Performance Indicators
Thinking about
the coming 12
months, please
comment on
the probable
change for your
organization for
each of the
following key
performance
indicators
Pricing & Other Costs Average Change Expected
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Prices Charged 1.5% 1.8% 1.9% 1.9% 1.9% 2.1% 2.1% 2.5% 2.5% 2.2% 2.1% 2.2% 1.9% 1.8% 2.0% 0.2% 0.9%
Input Prices 1.9% 2.4% 2.4% 2.5% 2.4% 2.5% 2.7% 3.2% 3.2% 3.0% 2.6% 2.6% 2.4% 2.3% 2.3% 1.4% 1.8%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
16 3Q 2020 Economic Outlook Survey
Key Performance Indicators
Thinking about
the coming 12
months, please
comment on
the probable
change for your
organization for
each of the
following key
performance
indicators
Spending Plans - IT, Other Capital & Training
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
IT 2.8% 2.9% 3.0% 3.2% 3.5% 3.6% 3.7% 3.7% 3.6% 3.3% 3.5% 3.4% 3.4% 3.5% 3.6% 0.4% 1.9%
Other Capital 2.4% 2.7% 2.6% 2.8% 3.3% 3.1% 3.9% 3.6% 3.5% 3.0% 2.9% 3.0% 3.0% 2.5% 2.9% -2.0% 0.1%
Training 1.6% 1.6% 1.8% 2.0% 2.1% 2.2% 2.4% 2.4% 2.3% 2.0% 2.3% 2.1% 1.9% 1.9% 2.1% -1.7% -0.2%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
17 3Q 2020 Economic Outlook Survey
Key Performance Indicators
Thinking about
the coming 12
months, please
comment on
the probable
change for your
organization for
each of the
following key
performance
indicators
Spending Plans Marketing & R&D
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Marketing 1.4% 1.5% 1.9% 1.8% 1.8% 2.0% 2.1% 1.9% 1.9% 1.9% 2.0% 1.6% 1.6% 2.0% 1.8% -2.4% -0.5%
R&D 1.1% 1.5% 1.7% 1.5% 2.0% 2.0% 2.0% 2.2% 2.0% 1.7% 1.9% 1.5% 1.4% 1.7% 1.7% -1.6% 0.1%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
18 3Q 2020 Economic Outlook Survey
Hiring Plans Summary
Have right number of employees
Maintained Q2 levels
Have an excess of employees
Down 9% from Q2
Have too few, but hesitating to hire
Up 1 point from Q2
Have too few and planning to hire
Up 6 points from Q2
14%
55%
16%
13%
Remain relatively strong
19 3Q 2020 Economic Outlook Survey
Hiring PlansOverall 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 excessnumber ofemployees
We haveapproximately the
appropriate numberof employees
We have too fewemployees, but are
hesitating to hire
We have too fewemployees and are
planning to hireOther
3Q19 9% 51% 13% 25% 2%
4Q19 8% 46% 15% 28% 3%
1Q20 7% 51% 14% 26% 2%
2Q20 25% 51% 13% 7% 3%
3Q20 16% 55% 14% 13% 3%
0%
10%
20%
30%
40%
50%
60%
20 3Q 2020 Economic Outlook Survey
Challenges Facing Organizations
Indication of the
top three
challenges for
your organization
• Domestic economic conditions remained as #1 challenge
• Domestic political leadership jumps up 4 spots to #2
• Employee and benefit costs jumps 6 spots - now at #3
• Availability of skilled personnel jumps up 4 spots to #4
• Stagnant/declining markets drop 3 spots to the #5 spot
• Regulatory requirements drop 1 spot to #6
• Global economic conditions drop 3 spots to #7
• Changing customer preferences up 2 spots to 8th place
• Domestic competition returns from 1Q20 spot 2 to #9
• Materials/supplies/equipment costs returns to the 10th position after
falling off in 1Q20
10Top
Challenges YTD
21 3Q 2020 Economic Outlook Survey
10Top
3Q19 4Q19 1Q20 2Q20 3Q20
1 Availability of skilled personnel Availability of skilled personnel Availability of skilled personnel Domestic economic conditions Domestic economic conditions
2 Domestic economic conditions Domestic economic conditions Domestic competition Stagnant/declining markets Domestic political leadership
3 Domestic political leadership Domestic competition Domestic economic conditions Liquidity Employee and benefits costs
4 Domestic competition Employee and benefits costs Domestic political leadership Global economic conditions Availability of skilled personnel
5 Employee and benefits costsRegulatory
requirements/changes
Regulatory
requirements/changes
Regulatory
requirements/changesStagnant/declining markets
6Regulatory
requirements/changesDomestic political leadership Employee and benefits costs Domestic political leadership
Regulatory
requirements/changes
7 Staff Turnover Staff TurnoverDeveloping new
products/services/markets
Financing (access/cost of
capital)Global economic conditions
8 Stagnant/declining marketsDeveloping new
products/services/marketsStaff Turnover Availability of skilled personnel
Changing customer
preferences
9Developing new
products/services/marketsStagnant/declining markets Global economic conditions Employee and benefits costs Domestic competition
10Changing customer
preferences
Changing customer
preferences
Materials/supplies/
equipment costs
Changing customer
preferences
Materials/supplies/
equipment costs
Industry, Region and Business-size Outlook
22
Retail and wholesale trade recover
Manufacturing improves;
Technology also bounces back
Construction rebounds;
Real estate declines further
Retail trade recovered from only 29% optimistic to 48% optimistic in Q3
Wholesale trade also rebounded to 43% optimistic
Hiring for retail also recovered from an expected decrease of 4.12% to an expected increase of 1.0% going forward from Q3
Manufacturing hiring plans also improved to an expected increase of 0.7% from a decrease of 2.0% in Q1
Technology hiring, which had been projected to decline by 1.2%, is now expected to increase by 1.5%
Construction optimism rebounded from only 29% in Q2 to 49% optimistic in Q3
Real Estate and Property declined another 7 points, to now only 31% optimistic
Construction hiring plans which had also been expected to decline by 1.3%, are now expected in increase 0.10%
Real Estate hiring is expected to decline by 0.1%
Manufacturing optimism improved from only 31% to 54% optimistic
Technology bounces back from only 35% in Q2 to 55% optimistic in Q3
3Q 2020 Economic Outlook Survey
Industry, Region and Business-size Outlook
23
Finance & Insurance improves; Professional Services also rebounds
Healthcare providers optimism recovers;
Healthcare –others optimism and hiring both decline
Finance and Insurance optimism improves from 40% to 49% optimistic
Professional Services rebounded from only 27% optimistic in Q1 to now 40% optimistic
Finance and insurance hiring is expected to improve from -0.6% in Q2 to 0.6% in Q3
Professional services hiring is now expected to be flat, after an expected decrease of 2.1% in Q2
Healthcare provider optimism recovered from only 24% optimistic in Q2 to 39% in Q3
Healthcare–other declined from 48% optimistic in Q2 to 38% in Q3
Expected hiring by Healthcare providers, which had been expected to decline by 1.8% is now expected to increase by 0.6%
Healthcare – other hiring eased from an expected increase of 1.8% in Q2 to 0.5% in Q3
3Q 2020 Economic Outlook Survey
Organization Optimism by Industry
24
61%
69%
56%
40%
54%
63%57%
29%
48%
0%
20%
40%
60%
80%
100%
3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Retail Trade
78%
67%
57% 57%51%
55%59%
31%
54%
0%
20%
40%
60%
80%
100%
3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Manufacturing
60%
82%
65%70%
75%
48%
76%
35%
55%
0%
20%
40%
60%
80%
100%
3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Technology
63% 63%
89%
75%
52%58%
68%
26%26% 43%
0%
20%
40%
60%
80%
100%
3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
Wholesale Trade
3Q 2020 Economic Outlook Survey
Organization Optimism by Industry
25
66%
75%
64%67%
52%
69% 68%
38%31%
0%
20%
40%
60%
80%
100%
3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Real Estate & Property
69% 69%74%
83%76%
66%
83%
29%
49%
0%
20%
40%
60%
80%
100%
3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Construction
84%79%
65%61%
67%61%
68%
27%
40%
0%
20%
40%
60%
80%
100%
3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Professional Service
78%72% 74%
77%
67%
75% 74%
40%
49%
0%
20%
40%
60%
80%
100%
3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Finance & Insurance
3Q 2020 Economic Outlook Survey
Organization Optimism by Industry
26
67% 65%
56% 57%
42%
60%
71%
48%
38%
0%
20%
40%
60%
80%
100%
3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Health Care - Other
61% 60%
51%
63%58%
67%
54%
24%
39%
0%
20%
40%
60%
80%
100%
3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
Health Care Provider
2Q 2020 Economic Outlook Survey
27 3Q 2020 Economic Outlook Survey
Expected Employment Change by Industry
Thinking about the coming 12 months, please comment on the
probable change for your organization for number of employees
-5.0
-3.9
-3.2
-2.1
-0.4
-2.7
-1.2
-2.1
-1.3
1.8
-1.8
-0.6
-2.0
-4.1
-1.0
-3.6
-2.3
-0.8
-0.8
-0.2
-0.1
-0.1
0.0
0.1
0.5
0.6
0.6
0.7
1.0
1.5
-6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0
Q3 Q2
Technology
Retail Trade
Manufacturing
Finance and Insurance
Healthcare - providers (hospitals, nursing homes, etc.)
Healthcare - other (pharma, device suppliers, etc.)
Construction
Professional, Scientific and Technical Services
Real Estate & Property
Wholesale Trade
Banking
Not for Profit
Transportation, Distribution and Warehousing
Mining, Natural Resources and Oil & Gas
Hospitality and Food Services (incl. travel and leisure)
28 3Q 2020 Economic Outlook Survey
Industry, Region and Business-size Outlook
Midwest – optimism improved from 27% to 37%
West – optimism improved 12 points from 30% to 42%
South – improved from 34% to 46%
Northeast – improved from only 26% optimistic in Q2 to 38% in Q3
For employers with > $1 billion in revenues, 20% now have excess employees, while 34% have too few. Of those with too few employees, 19% remain hesitant while 15% are planning to hire.
Of those in the $100 million to $1 billion category, 29% say they have too few employees; 18% are hesitant; while 11% are hiring.
In the $10 - $100 million range, 26% now have too few employees; of those with too few, 12% are hesitant; 14% are hiring.
Of employers with revenues < $10 million 25% have too few employees; 14% are hesitant; 11% are hiring.
Expectations for expansion by businesses with revenues < $10 million improved 16 points to 40%. Plans for companies in the $10 - $100 million category improved 17 points to 41%. Companies in the $100 million to $1 billion range recovered 25 points to 48%; those with revenues in excess of $1 billion gained 21 points to 44% having plans to expand.
Regional optimism shows big drops across regions
Employment projections by business size and expansion plans by size also reflecting lower optimism
29 3Q 2020 Economic Outlook Survey
Organization Optimism by Region
The rating that
best describes
your view for the
economic outlook
for your own
organization for
the next 12
months.
3Q19 4Q19 1Q20 2Q20 3Q20
Midwest 54% 58% 67% 27% 37%
West 60% 63% 67% 30% 42%
South 61% 61% 68% 34% 46%
Northeast 59% 55% 61% 26% 38%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
30 3Q 2020 Economic Outlook Survey
Expansion Plans by Business Size
Indicate whether
you expect your
business to
expand or
contract over the
next 12 months
3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
< $10 million 63% 64% 60% 63% 62% 52% 62% 24% 40%
$10 to <$100 million 70% 70% 67% 66% 64% 59% 64% 24% 41%
$100 million to <$1 billion 73% 62% 67% 63% 54% 62% 65% 23% 48%
> $1 billion 74% 71% 66% 64% 63% 68% 63% 26% 44%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
35% of all businesses expect to expand a little in
the next twelve months
8% expect to expand a lot
23% expect to stay the same
25% expect to contract a little
9% expect to contract a lot
Percentage
expected to expand
is consistent across
business size
31 3Q 2020 Economic Outlook Survey
Business hiring plans by company size
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 anexcess number of
employees
We haveapproximately the
appropriatenumber ofemployees
We have too fewemployees, butare hesitating to
hire
We have too fewemployees andare planning to
hire
Other
< $10 million 14% 58% 14% 11% 3%
$10 to <$100 million 16% 54% 12% 14% 3%
$100 million to <$1 billion 12% 58% 18% 11% 2%
> $1 billion 20% 43% 19% 15% 3%
0%
10%
20%
30%
40%
50%
60%
70%
Demographics
32
24%
34%13%
10%
5%
4%10%
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
67%
18%
12%
2% 1%
Type of Organization
Privately Owned Entity
Not for Profit
Publicly Listed Company
Other
Government
45%
22%
7%
7%
7%
5%2%
2%2%
Position
CFO
Controller/Comptroller
CEO/COO
Director/Managing Director
President
Vice-President/SVP
Chief Officers (CAO/CIO/CTO/CRO/KMO)
Other (please specify)
Accounting, Audit, Tax or Technology Manager
2Q 2020 Economic Outlook Survey
AICPA Economic Outlook Survey
Survey within a Survey
Coronavirus pandemic (COVID-19)
Q3 2020
34 3Q 2020 Economic Outlook Survey
Pandemic greatest concern
What is your
greatest
concern about
the COVID-19
pandemic right
now?
4%
2%
5%
5%
22%
29%
33%
0% 5% 10% 15% 20% 25% 30% 35%
Other
Liability issues
Integrity of supply chain
Cash, financing, capital challenges
Customer demand/ability to pay
Uncertainty about stay-at-homerestrictions
Safety/well-being of employeesand/or customers
35 3Q 2020 Economic Outlook Survey
Pandemic greatest concern – other
Greatest concern – “other” responses
Impact on our customers
Lack of work to bid
Lifting of hiring freeze
Impact of multiple paradigm shifts in customer expectations
The extent of return of business
Significant reduction of consumer spending
Getting product from overseas and then customer ability to pay.
What is your
greatest
concern about
the COVID-19
pandemic right
now?
36 3Q 2020 Economic Outlook Survey
Provided that
stay-at-home
restrictions will
allow, how does
your company
expect to handle
remote work
versus on-site
operations over
the next 12
months?
Pandemic – remote work vs. on-site plans
15%
5%
9%
22%
33%
17%
0% 5% 10% 15% 20% 25% 30% 35%
N/A -The nature of our businesshas not involved significant remote
working
Too much uncertainty at this pointto say
Continue to be primarily remote
Majority remote with mix of onsiteactivity
Majority onsite with mix of remoteactivity
Return to primarily onsite withlimited exceptions
37 3Q 2020 Economic Outlook Survey
Pre-pandemic remote work capabilities
How would you
describe your
company’s
remote work
capabilities
pre-pandemic?
14%
28%
32%
20%
4%
0% 5% 10% 15% 20% 25% 30% 35%
Non-existent
Spotty throughout company
Strong in some parts of thecompany, uneven in others
Strong in all aspects as mostworkers could operate virtually
We were completely virtual
38 3Q 2020 Economic Outlook Survey
Planned Safety Measures
What is your business
planning to do over
the next 12 months to
ensure the safety of
employees and
customers at your
physical location?
(Check all that apply)
Mandating masks in workplace 74%
Providing socially distanced interior workspaces or areas for customer interaction 71%
Providing PPE (personal protection equipment) 64%
Screening workers daily (i.e., temperature checks) 52%
Staggering worker shifts to minimize contact 37%
Screening customers 24%
Upgrading filters and making other improvements to HVAC systems 21%
Automating point-of-sale and other flash points for customer interaction 10%
Providing covered outdoor areas for our employees and/or customers 8%
Other (please specify) 5%
Does not apply because we are operating entirely virtually 4%
None of these 3%
39 3Q 2020 Economic Outlook Survey
Planned safety measures – “other”
What is your business
planning to do over
the next 12 months to
ensure the safety of
employees and
customers at your
physical location?
(Check all that apply)
Other safety measures
Staggering start times
Split our employees into pods that do not physically interact
Social distancing everywhere in offices and plants
Implement paperless transactions
More virtual sales tools
Restricting access to outside vendors/customers to essential interactions
Discontinued vending services/coffee and water fountains
Quarantine when and where necessary
Additional cleaning and sanitation
Disinfecting high touch point surfaces
HCQ (hydroxychloroquine) education
40 3Q 2020 Economic Outlook Survey
Office footprint
Are you
planning on
changing your
office footprint
over the next
12 months?
Office space plans %
We plan on reducing footprint by less than 10 percent 5%
We plan on reducing footprint by 10 percent to 24 percent 5%
We plan on reducing our footprint by 25 percent to 49 percent 3%
We plan to reduce our footprint by 50 percent or more 4%
We are giving up all our traditional office space 1%
We plan on increasing our office space 5%
We don't plan any changes 77%
41 3Q 2020 Economic Outlook Survey
Office footprint reduction rationale
If you indicated
you were
reducing your
office footprint,
what is the
reason?
(Check all that
apply)
27%
20%
81%
23%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Other (please specify)
Decline in business operations
Shift to remote operations
Reduction in staffing
42 3Q 2020 Economic Outlook Survey
Office footprint reduction rationale – other
If you indicated
you were reducing
your office
footprint, what is
the reason?
“other” responses
Other reasons for reducing office footprint
Combine locations
Opportunity to sell a building
Close remote office
Giving up unused capacity
Closing business when lease expires
Relocating staff out of the US
43 3Q 2020 Economic Outlook Survey
Current cash position
How would you
describe your
company’s
current cash
position?
47%
38%
12%
2%0%
Strong Acceptable Concerning Dire Not sure
44 3Q 2020 Economic Outlook Survey
Liquidity concern level
How concerned
are you about
your company’s
liquidity position
over the next 12
months?
10%
25%25%
14%
26%
Significantconcern
Moderateconcern
Slight concern Neutral No concern
AICPA Business and IndustryEconomic Outlook Survey 3Q 2020
For additional information contact:
Kenneth W. Witt, CPA, CGMASenior Manager Management [email protected]
Cary JonesAssociate ManagerManagement [email protected]
Thank you!