AICPA/UNC Kenan-Flagler Business & Industry Economic Outlook Survey update shows continued optimism from C-Suite members

In keeping with the past, I thought I’d let you know the latest results (3^rd Quarter) of the AICPA/UNC Kenan-Flagler Economic Outlook Survey are available on the AICPA Financial Management Center.  On April 28^th my blog post was about the first quarter’s survey results and on May 21^st my blog post was on the second quarter results. The AICPA C-Suite members surveyed continue to show signs of improvement in the economy.

Respondents who were pessimistic about the economy dropped from 53% in the 2^nd quarter to 41% in the 3^rd quarter.  Pessimists still outnumber optimists, but it’s a good sign that the total number have dropped.  It does take time to shift opinion and the move from pessimistic to neutral can be considered a positive shift.  Hopefully by the 4th quarter, we will see optimists outnumber the pessimists.

While there were some positives, there is also some caution.  Respondents have pushed back their belief on when the economy will improve with over 60% responding with either 1st half or 2^nd half of 2009.  Over 10% believe recovery won’t begin until 2011 or later.

Similar to the 2^nd quarter results, respondents were more optimistic about their own organization’s recovery than the overall economy, showing signs that some companies may already be on their way out of the recession.

The news does continue to get better.

Are you seeing signs of recovery in your business? What are some of the signs of recovery that you are seeing? Post a comment.

– Mark Koziel

Comments

There are no signs of recovery just blips of information of normal daily business activity. The journalists and companies interested in getting good news out about their companies are of course saying things are better but they are not. Of course they are going to say things are improving, that's how they get their stock up. The only way we will know when recovery happens is when we look back one or two years from now to see what happened and when. If everyone would just invest proper to their risk level and rebalance according to their own situation, live in moderation and quit trying to guess the future because they can't the market will be better off and people will be better off.

I see signs of an economic recovery and I see signs of a market correction. In that all recessions end, one could argue that there are signs of recovery on day one of the recession. By definition, a recession is a sign that recovery is coming. I think a better question would be what half of the recession do we find ourselves? I think the NBER was generous and optimistic in dating the beginning of this recession as of December 2007. I believe it started October 2008. I really don't think we will see it end until around October 2010.

Economy is not improving. It has hit bottom and leveled out. My clients are not spending, profits are down, layoffs continue, etc. Fear of Government health care being rammed down their throats scares the crap out of them. Cap and Tax scares the crap out of them. All of the Csars under Obama scares the crap out of them. Higher tax rates scares the crap out of them. MASSIVE FEDERAL budget deficits now and in the future scare the crap out of them.

The stock market is up because of better earnings reported; earnings are up because labor costs are down; labor costs are down because of massive layoffs; consumer spending is nearly keeping pace because consumers are whistling as they walk pass the cemetary (minimal change in spending habits). People continue to lose their houses (does anyone not have an acquaintance who has lost their home?). The bulk of economic reporting is all symptoms, not root causes. The deficit is unsustainable and government intervention in the free market makes the whole situation worse. Had the government (both administrations) done nothing, beginning in Setember 2008, we might be seeing light at the end of the tunnel at this time.

I am not "seeing" any signs of economic recovery but that's not the worst part. I also believe that citizens, in general, are getting mislead and confused by the citing of such signs by those who are viewed as experts or professionals. People hear about the Dow going up, manufacturing output decreasing "less", etc. The problem is that most of those signs or figures that are being reported as positive are very different from what most people experience everyday. The "real" world, outside of that lingo and reports (like the job reports for example, which are so biased)is not one of positive economic signs at this point. I assume that good intentions are behind the so-called positive signs being reported, but it is having the opposite effect. People either assume that they are being lied to, or that those reporting the signs just don't care about what's really going on. Some others believe that they are being asked to do precisely what got us into this mess we are in, indiscriminate and irresponsible spending. Why would someone, for example, go out and get into debt now to buy a new car when the one he/she is driving is in perfect condition? There are no true signs of economic recovery out there, just gains on the part of certain individuals and entities (profiting from a crisis perhaps?). I could play the politically correct game and repeat all that diatribe about recovery and the end of the recession, but I refuse to do that because it is not true; of course, I'm talking about the real meaning of recovery not the political version of it.