The U.S. economy looks to be moving steadily forward with low unemployment and wages ticking upward, and Kentucky is rolling along for the ride. The commonwealth’s CPA firm sector says its customers project general optimism and continue to seek advice on planning for moderate growth and making the most of 2017 tax law changes. Firms see their clients looking for growth opportunities and the technology and personnel needed to make it happen. Moves toward resolution or trade tensions are encouraging. Tight labor availability is a potential limitation on growth. Ongoing baby boomer retirements, however, are creating more merger and acquisition activity when company leaders depart without having prepared for succession.
“In 2020, we expect continued moderate growth in the overall economy. The continued global challenges coupled with a presidential election provide external factors that could play a key factor in growth opportunities in 2020. In Kentucky, the outcome of the current legislative session could also play a role in growth prospects for the commonwealth, depending on the direction taken with new revenue initiatives. Given the macroeconomic risks, it is more important than ever for companies to continue to look for increased efficiencies and process improvements while exploring their unique growth opportunities.” — Brad Smith, Managing Partner, MCM CPAs & Advisors
“Even with the current economic expansion now approaching 11 years, the U.S. economy still appears healthy enough to continue growing throughout 2020. Steady amounts of new jobs continue to be added monthly, keeping unemployment at a 50-year low. The first phase of a trade deal with China has lessened most fears of an impending recession. Business owners, while showing increased optimism at the end of 2019, continue to desire strategic business and tax planning to navigate the uncertainty of the remaining expansion and to maximize the benefits of the 2017 tax law. As such, we continue to take a more comprehensive and holistic approach to serving our clients, widening our breadth of services, while maintaining the depth of expertise that Dean Dorton is known for.” — David Bundy, President/CEO, Dean Dorton
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“In 2020, companies anticipate continued growth and investment while riding the continuance of a strong national economy. In Kentucky, the impact of the new governor working with a pro-business legislature is yet to be determined; however, businesses are hopeful the growth in the commonwealth mirrors that of the nation. We see evidence of this in our client base as companies continue to make investments in people, capital expenditures and acquisitions. However, there are some constraints with finding qualified individuals in the workforce due to low unemployment and other factors that impact employability. Crowe continues to grow as it embraces technology transformation and positions itself as a technology firm – integrating significant technology investments in every business line. Crowe’s Kentucky geography also continues to grow following another record year of hiring in its traditional professional services groups and the Crowe Security Intelligence Center in Lexington.” — Steve Jennings, Lexington Office Managing Partner, Crowe LLP
“As baby boomers still represent the largest percentage of business owners in our state, we should continue to see historic levels of business ownership transition. This is a trend that began the previous decade, as the earliest baby boomers began to reach retirement age. As business owners look for ways to monetize their largest source of wealth in their business, we have seen a significant influx of institutional ownership, such as private equity, into the middle market space. With “dry powder” estimates nationally in excess of $2 trillion, we should see this trend to continue in 2020. However, political uncertainty in an election year could lead to a slight decrease in activity compared to 2019 and 2018 levels.” — Matt Berrian, Audit Director, BKD CPAs & Advisors
“2019 was a good year for accounting firms. With the economy still moving in a positive direction, we should see more of the same for 2020. The presidential election could have an effect, but with low unemployment and reports of higher wages, the economy will continue moving. Accounting industry technology disruptions keep coming: robotic process automation, blockchain, machine learning and artificial intelligence to name a few. As these get more traction, firms are called upon to help clients with services beyond the traditional, with advisory services seeing good growth. Finding competent and skilled employees is an issue all businesses face and makes it harder to grow. It requires larger investment in technology and faster adoption to provide customers and clients with the services they request. This will continue to drive growth in the accounting sector. Accounting sector mergers and acquisitions continue to be a hot topic. Firms whose partners reach retirement age without having worked on succession will look to merge or sell to firms that have succession plans; this is another area of growth for a lot of firms.” — Alan Long, Managing Member, Baldwin CPAs