Uncertainty around tariffs, interest rates, and inflation drove the decline in sentiment, the Journal of Accountancy reported. “There are a lot of warning signs right now for business executives, particularly around inflation, payroll costs, and consumer confidence, with tariffs adding another layer of uncertainty,” Tom Hood, EVP of business growth and engagement at the AIPCA and CIMA, told the news outlet. Nearly six in 10 respondents (59%) said tariffs would be detrimental to their businesses.

Finance leaders were also downbeat about the state of the global economy. Just 29% expressed optimism about how the world economy would fare in the next 12 months, down from 41% last quarter.

And they also foresaw slightly worse outcomes for their own companies. Their forecasts for revenue dipped to 3%, from 3.3% in Q4, and they anticipated 1.7% profit growth over the next 12 months, down from 2.2% last quarter.

A correction or a sign of a broader trend? In some ways, the survey findings represent a correction of the surge in economic optimism that followed the election. Last quarter, AICPA and CIMA collected responses from November 6–26, directly after the election. Optimism toward the US economy shot up 41 percentage points from Q3 2024, from 26% to 67%, partly because respondents anticipated deregulation and tax policy changes. Optimism toward the global economy also rose dramatically, from 19% to 41%.

That said, this quarter’s survey findings also align with a general trend toward economic pessimism in early 2025. Consumer confidence has weakened and, during earnings calls, executives have warned of a pullback on discretionary spending. We may need to await the Q2 2025 results to get a clearer picture.

This report was written by Courtney Vien and was originally published by CFO Brew.