Ohio CPAs predict economic recovery is at least one year away

For More Information: Amy Johnson, Senior Manager, Public Relations E-mail: ajohnson@ohio-cpa.com  614-764-2727, ext. 341 (office) 614-975-2225 (cell)

Credit crunch likely to inhibit Ohio’s business growth

(COLUMBUS, OH – December 9, 2008) – A sustainable economic recovery will not occur until the last half of 2009 or the first half of 2010, according to CPAs participating in The Ohio Society of CPAs’ annual Ohio Business Poll in November.

Of more than 500 CPAs responding, a majority pointed to risky lending and consumers borrowing beyond their means as the top factors contributing to the national financial crisis.

Only 37% felt that lack of regulatory oversight was a major factor. While 7 in 10 CPAs said the government’s intervention efforts may be somewhat effective or effective in stabilizing the economy, 61% did not favor more government regulation as a solution.

CPAs did point to a need for more public education on lending and personal finance (39%) to help prevent future crises, while 23% advocated a ban on sub-prime lending.

Ohio Business Growth & Capital Investments

CPAs participating in the poll felt the national economic crisis, combined with state-specific factors, is inhibiting business growth in Ohio. Fifty percent of respondents cited Ohio’s tax climate and 32% named the auto industry crisis as top factors. In contrast to the 2007 poll, 77% forecast a decrease in capital investments during 2009, compared with only 34% last year. Eight in 10 CPAs predicted Ohio’s job growth will not keep pace with the rest of the U.S.

In addition, two-thirds (63%) of respondents, who are c-suite executives in Ohio’s leading companies and CPA firms, were concerned that Ohio small businesses do not have access to adequate credit to sustain and grow their companies over the next year.
CPAs’ predictions for growth in Ohio are similar to opinions their peers nationwide hold for growth elsewhere. In a Fourth Quarter Economic

Outlook Survey sponsored by The American Institute of CPAs, 41% of respondents were pessimistic about U.S. business growth in 2009 while only 26% were optimistic.

“The current economic situation has been building for some time and a turnaround won’t take place overnight,” said J. Matthew Yuskewich, CPA, Winterset CPA Group and chair-elect of The Ohio Society of CPAs.

“In Ohio, CPAs are working closely with businesses to reassess growth plans and capital needs, and implement pre-emptive strategies that will keep more businesses solvent in this tough environment.”

After the economy, rising healthcare costs were cited by 69% of those polled as a leading financial challenge for Ohio businesses, compared to 45% last year. A majority (61%) said they would increase employees’ portion of the premium to control costs.

On a positive note, nearly 70% of CPAs polled predicted they had no plans to eliminate the employer match in 401(k) retirement savings plans, directly in keeping with CPAs’ goals of incenting individuals to save more.

Tax Policy

A third of respondents were very concerned about the effect of Ohio’s tax climate on business. For the third straight year, CPAs pointed to the need for greater administrative uniformity of municipal income taxes (37%) as their top reform priority, followed by reducing individual income taxes (36%).

The 2008 Ohio Business Poll was conducted by The Ohio Society of CPAs from Nov. 7 – Nov. 19, 2008. Respondents included 529 CPAs who are partners in regional and national public accounting firms, or serving as CEOs, COOs and CFOs in Ohio’s leading businesses. The margin of error on this research is +/-3% on each item at a confidence level of .95.

An executive summary of the 2008 Ohio Business Poll is available in the newsroom of The Society’s Web site at http://www.ohioscpa.com/.
Resources and money management tips are available for consumers of all ages and stages of life at http://www.financialfitnessohio.com/.

The Ohio Society of CPAs, established in 1908, represents more than 23,000 CPAs in business, education, government and public accounting.  The Ohio Society’s members not only meet statutory and regulatory requirements as CPAs, but also embrace the highest standards of professional and ethical performance. This is achieved through ongoing professional education, comprehensive quality review and compliance with a strict Code of Professional Conduct.

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