CPAs Counting On Best Year in a Decade

By The Lane Report Staff

CPA
National GDP might be mired in the low single digits, but the state’s CPA firms think they could see double-digit growth.

We take notice when a member of the traditionally conservative CPA sector says it could be the best year economically in a decade. Economic outlook projections among Kentucky’s CPA firms are strikingly rosy, though. Generational retirements in the baby boomer cohort are driving demand at accounting firms for succession planning across many commonwealth business sectors, even among CPA firms. Meanwhile, strong growth is expected this year in construction, equine, healthcare, manufacturing and bourbon. Another broad trend, the ongoing growth of online sales, is benefitting Kentucky’s national logistics hub. National GDP might be mired in the low single digits, but the state’s CPA firms think they could see double-digit growth.

 

 

Diane Medley, Managing Partner, Mountjoy Chilton Medley

Diane Medley
Diane Medley

“As a managing partner of a large accounting firm and as the chair of Greater Louisville Inc., keeping an eye on the economic forecast is a part of my job. Economic activity for the country appears stronger this year, particularly with anumber of large-scale mergers and acquisitions transactions in the headlines. We also need to be keeping an eye on changing global economies, which will inevitably impact our own. From an industry perspective, talent retention in accounting continues to be a challenge. Kentucky’s current tax policy and economic situation are also challenges – they hamper our ability to compete with neighboring states and greatly impact clients.”

 

 

G. Alan Long, Managing Member, Baldwin CPAs

G. Alan Long
G. Alan Long

“2016 will be a good year for accounting firms. The strengthening economy along with increased regulation and accounting standard changes will drive more need for services. The connectivity of the world is driving large and small businesses to seek opportunities in the global market, and CPA firms are well positioned to deliver these new services. The biggest obstacle for firms will be finding enough qualified employees to handle the additional work. The “boomer” factor is changing the dynamics of the economy. More are looking to retirement and succession planning, which is creating additional opportunities to provide clients with other necessary planning they need. Succession planning also is driving M&A activity among accounting firms of all sizes as more of the owners are looking to move into retirement.”

 

 

David Bundy, President/CEO, Dean Dorton Allen Ford

David Bundy
David Bundy

“At Dean Dorton we are very optimistic about 2016 and have expanded a great deal to be prepared to assist clients as needed. We expect many of our clients, especially those in the construction, equine, healthcare and manufacturing industries, to see continued strong economic growth. However, we do realize that the economic growth is not consistent across the commonwealth. Many of our clients, especially those outside of the Louisville and Lexington metropolitan areas, those in the natural resources industry, and those impacted heavily by government funding, such as higher education, may experience little to no growth and face on-going business challenges in the year ahead.”

 

 

Mike Stigler, Director, Blue & Co 

Mike Stigler
Mike Stigler

“Unemployment will continue to decline to 4.6 percent. The state will benefit from major manufacturing investments by the automotive industry (Ford and Toyota) and their component suppliers. Completion of the Louisville river bridges will impact investments in distribution and logistics in the regional market. Construction will benefit from demand for commercial and residential building inventory. Uncertainties that could negatively impact the economy are legislative management of state pension funding (second worst funded in the United States), potential changes to Medicaid coverage expansion (affecting 400,000 citizens and $1 billion of federal funding) and lack of readily available skilled labor.”

 

 

Penny Gold, CEO, Kentucky Society of CPAs

Penny Gold
Penny Gold

“While there has been troubling volatility in the stock markets recently, and some indicators show slowing manufacturing and retail sales, consumer confidence runs relatively high. The bright spot for Kentucky is automotive manufacturing; this remains strong, and U.S. optimism has been an important driver. While retail may be sluggish, online sales hit record highs this holiday season. Kentucky is a logistics hub for the nation, so continued growth in this segment is likely. And, of course, Kentucky bourbon and spirits are enjoying strong growth internationally. This provides Kentucky another economic cushion in hard times. The United States is a bright spot in the global economy, and Kentucky is well positioned for a good year.”

 

 

Steve Jennings, Crowe Horwath LLP, Local Office Managing Partner, Lexington

Steve Jennings
Steve Jennings

“What we’re seeing in Kentucky is a reflection of the U.S. economy. While the economy continues to grow, in some areas it is at a slower rate, while other areas are expanding faster. We’re seeing that at Crowe as well with a projection of growth overall, and in many of our practice areas, an expectation of double-digit growth. We continue to use our deep industry expertise to provide audit services to public and private entities while also helping clients reach their goals with tax, advisory, risk and performance services.”

 

 

Matt Coffey, Partner, BKD

Matt Coffey '
Matt Coffey

“We have seen a tremendous increase in demand for consulting and advisory services and expect that trend to continue. Clients’ outlooks of “cautiously optimistic” that were prevalent during the past five years have shifted noticeably during the last 12 months. Clients are proactively making investments and hiring talent to drive growth in their businesses. There continues to be a significant level of activity related to business succession driven by both the number of baby boomer owners looking to retire and the amount of capital available to fund buyouts. The growth within public accounting will be limited only by our ability to continue to develop and retain talent within our profession. I believe 2016 represents a better opportunity for growth than any year in the past decade.”

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