Gloom pervades business survey

Financial executives have grown increasingly gloomy, with nearly half saying it will be at least 2010 before there is any improvement in the U.S. economy, according to a survey released Monday.

The survey of 1,606 financial officials conducted by the American Institute of Certified Public Accountants and the University of North Carolina's Kenan-Flagler Business School showed that only 9 percent expect the economy to begin to improve before the second half of 2009. And 48 percent see no improvement until 2010 or later.

They blame the credit crisis, increasing unemployment and declines in consumer spending and consumer confidence.

"CPAs are trained to be objective and analytical and are not prone to hype and emotion, so when they foresee our economic problems extending well into 2009 and beyond, it is a troubling forecast," said Arleen Thomas, AICPA senior vice president, in a prepared statement.

Pessimists outnumbered optimists by 16 to 1 in the results of the fourth quarter AICPA/UNC Kenan-Flagler Business and Industry Economic Outlook survey conducted Nov. 5 to 17. In the survey, 18 percent of respondents said that they were "very pessimistic," three times the number who felt that way three months ago.

The results are similar to those found by a recent quarterly survey of corporate chief financial officers by Duke University and CFO Magazine.

The AICPA/UNC survey also shows company officials are taking steps to respond to the economic downturn by cutting capital spending, laying off workers, freezing hiring and restricting travel.

"As firms cut their own expenditures in anticipation of reduced demand for their products, it will become a self-fulfilling prophecy rippling through the economy," said UNC accounting professor Mark Lang.