Policy easing by central banks should support global growth, but uncertainty is extremely elevated amid geopolitical developments and the upcoming U.S. election
The latest ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) Global Economic Conditions Survey (GECS) suggests that global confidence among accountants and finance professionals declined moderately in Q3 and is now at its lowest since Q4 2023 and slightly below its historical average. CFOs’ confidence also fell, and in particular, there was a sharp deterioration in their assessment of new orders.
Confidence improved in North America, although it recouped less than half of its previous fall. By contrast, there was a marked decline in confidence in Asia Pacific. Concerns about the continued weakness of the Chinese economy likely weighed on sentiment, with the survey being completed before the authorities announced a pivot to a more aggressive policy stimulus. Confidence also fell quite materially in Western Europe, driven by a sharp decline in UK confidence, amid concerns about tax rises in the upcoming Budget.
The proportion of respondents reporting increased operating costs remains elevated by historical standards in most regions, suggesting central banks need to proceed quite cautiously with monetary easing, particularly given ongoing geopolitical developments. On an encouraging note, the share of global respondents reporting problems accessing finance moved lower again amid policy easing by central banks.
The survey also asked accountants to rank their top three risk priorities and for the second quarter running, regulatory change was top for respondents in financial services, while the economy remained first for those in the corporate sector. Both public sector entities and small and medium-sized practices put cybersecurity as their biggest concern. But strikingly, for the first time, climate change claimed a top three spot, with the public sector placing it third. Another first-ever was by region, with Western Europe ranking talent scarcity and retention first.
Jonathan Ashworth, Chief Economist, ACCA, said: ‘The global economy has been quite resilient so far in 2024, but the latest survey of accountants points to some easing in growth at the current juncture’.
Alain Mulder, Senior Director Europe Operations & Global Special Projects at IMA said: ‘While the increase in confidence in North America is welcome, the key indicators are consistent with some slowing in the U.S. economy and significant caution on behalf of businesses. But with the job market showing resilience and the Federal Reserve beginning its rate-cutting cycle, the most likely scenario for the U.S. economy still looks to be a soft landing’.
Ashworth concluded: ‘On a positive note, increased policy stimulus should boost the Chinese economy, and the move to rate cuts by the U.S. Federal Reserve, and many other central banks, will increasingly support global activity. That said, geopolitical risks are extremely elevated, and significant uncertainty about the upcoming U.S. election could increase corporate caution. Bottom line, businesses are currently operating in a world of heightened uncertainty’.
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About ACCA
We are ACCA (the Association of Chartered Certified Accountants), a globally recognised professional accountancy body providing qualifications and advancing standards in accountancy worldwide.
Founded in 1904 to widen access to the accountancy profession, we’ve long championed inclusion and today proudly support a diverse community of over 252,500 members and 526,000 future members in 180 countries.
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About IMA® (Institute of Management Accountants)
IMA® is one of the largest and most respected associations focused exclusively on advancing the management accounting profession. Globally, IMA supports the profession through research, the CMA® (Certified Management Accountant), CSCA® (Certified in Strategy and Competitive Analysis), and FMAA™ (Financial and Managerial Accounting Associate) certification programs, continuing education, networking, and advocacy of the highest ethical business practices. Twice named Professional Body of the Year by The Accountant/International Accounting Bulletin, IMA has a global network of about 140,000 members in 150 countries and 200+ professional and student chapters. Headquartered in Montvale, N.J., USA, IMA provides localized services through its six global regions: The Americas, China, Europe, Middle East/North Africa, India, and Asia Pacific. For more information about IMA, please visit www.imanet.org.
About GECS
The Global Economic Conditions Survey (GECS), carried out jointly by ACCA and IMA, is the largest regular economic survey of accountants around the world, in both the number of respondents and the range of economic variables it monitors. The GECS has been conducted every quarter for over 10 years. Its main indices are good lead indicators of economic activity and provide a valuable insight into the views of finance professionals on key variables, such as investment, employment and costs.
Fieldwork for the 2024 Q3 survey took place between 3 and 19 September 2024, gathering 697 responses: 476 from ACCA members and 221 from IMA members.