Only 47% of U.S. executives polled in mid-February were optimistic about the domestic economy, a sharp falloff from 67% shortly after the November presidential election. 

The election result initially appeared to have influenced a giddy outlook among executives, after the economic optimism rate in the quarterly survey by AICPA/CIMA had sunk to a mere 26% late last summer as the Biden presidency waned. 

Now, confidence in the near future is again wavering, and not only with respect to the U.S. economy. Among the 305 participants in the new quarterly survey — primarily CFOs, controllers and CEOs — the global outlook likewise dropped, from 41% optimistic in November to 29% last month. 

There was less of a hit to executives’ assessment of their own prospects, with optimism falling just three percentage points, from 53% to 50%. 

Economic pessimists indicated they were most concerned about chaos stemming from new policies and the potential impact of tariffs, according to the survey report. A vast majority (85%) of survey respondents reported uncertainty over the impact of tariffs, with 18% saying they felt “significant” uncertainty. 

Three in five survey-takers (59%) said they expected a negative impact from tariffs, compared with just 14% who expected a positive impact. 

Economic optimists, for their part, tended to cite continued growth of the economy and the pro-business Trump administration. 

On average, revenue forecasts for the following 12 months eased back from the 3.3% increase expected in late 2024, to 3.0% in the recent survey. Profitability projections followed suit, dipping to +1.7% from +2.2%. 

However, some key spending plans were so far unchanged. More than half (57%) of those polled said their companies are eyeing expansion efforts, the same as in the prior survey. The proportion of those planning expansions depended on company size: 81% for companies with revenues of at least $1 billion, down to 48% for those with a topline of less than $10 million. 

Plans for hiring also remained fairly consistent, with 39% of executives acknowledging they needed more employees. But about half of those said they’ll continue being hesitant to hire, while the other half said they will be hiring. 

In other spending categories, the sizes of expected increases over the following 12 months declined since the previous survey. Those included IT (from 3.2% to 2.7%), other capital spending (from 2.9% to 2.0%), and employee training (from 1.6% to 1.3%). 

For the fourth time in the past five quarterly surveys, executives cited interest rates as their biggest challenge. Asked about inflation-related risk factors, 35% of the survey participants said labor costs represent the most significant risk to their business. That was followed closely by raw material costs, at 35%. Then came a steep falloff to interest rates, at 16%.