Economic optimism slides again amid tariff uncertainty

US finance executives’ optimism declined sharply in the second quarter, as tariff concerns mount and businesses pivot their strategies to accommodate shifting requirements, a new survey shows.

Finance decision-makers in the US expressed growing pessimism for the economy and their own businesses, and they have rising concern about uncertainty created by tariffs, according to a new quarterly survey.

Optimism about the US economy plummeted from 67% in the fourth quarter of 2024 to 47% in the first quarter to just 27% this quarter, the latest Economic Outlook Survey shows. The survey, released Thursday by the AICPA and CIMA, polled 328 finance decision-makers in business and industry, mainly CEOs, CFOs, and controllers.

Organisational optimism similarly fell, from 50% last quarter to 37% of executives optimistic about their own company prospects.

US economic conditions supplanted inflation as the top challenge. Respondents say they will pull back on hiring, and they project lower revenue and profit for the coming 12 months.

“We’re seeing a lot of revised expectations: delayed hiring and investment, pared-back expansion plans, lowered key performance indicators,” Tom Hood, CPA/CITP, CGMA, executive vice president–Business Growth & Engagement at the Association of International Certified Professional Accountants, said in a news release.

Sentiment about the global economy also declined, from 29% optimism in the first quarter to 19% this quarter. The backdrop to domestic and global economic disquiet is tariff uncertainty and shifting priorities of the current administration.

While optimists cite business-friendly support including expected tax changes, pessimists are concerned about the potential disruption of new policies and the impact of tariffs.

Tariffs disrupt corporate strategies

Tariff uncertainty in the survey has risen sharply, from 49% in the first quarter to 67% in the second, with business planning pivoting to meet challenging market conditions. The negative impact of tariff increases is led by higher prices for customers (35%) and increased supply chain costs that would be difficult to pass on (30%).

“The data shows a clear pivot from optimism to caution,” Hood said. “Businesses are bracing for volatility, and the uncertainty around tariffs is amplifying that shift.”

The top three business responses to tariffs in the survey are to:

  • Increase the prices of products (32%);
  • Explore different supply chain options (31%); and
  • Reduce operating costs (26%).


Key performance indicators

Hiring and business expansion plans, along with revenue and profit forecasts, have taken a hit.

Revenue forecasts for the coming 12 months declined from a 3% increase in the first quarter to a 1% increase this quarter. Profitability turned negative, going from a 1.7% projected increase in the first quarter to minus-0.3% in the second quarter.

The number of companies needing employees fell from 39% to 32%. Eighteen per cent continue to be hesitant to hire, and only 14% have plans to hire.

The projected increase in IT spending softened from 2.7% to 2.5%. The expected rate of increased spending for other capital also declined from 2% to 1.4%. Expected spending on training and development dropped from 1.3% to 0.7%.

The number of executives with expansion plans in the coming 12 months fell from 57% to 43% and varied by company size. Fifty-two per cent of businesses with $1 billion or more in annual revenue plan to expand — a notable decrease from 81% in the first quarter. Expansion plans for companies with revenue below $10 million eased from 48% to 44%.

Executives with plans to contract their business increased from 19% in the first quarter to 30% in the second quarter.

Miti Ampoma is a senior content writer at the Association of International Certified Professional Accountants. To comment on this article or to suggest an idea for another article, contact Neil Amato at Neil.Amato@aicpa-cima.com.

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