A story of pessimism with some bright spots in a volatile business environment and inflation fears
North American confidence recovers slightly in third quarter, but remains second weakest in survey history
SINGAPORE, November 7, 2022 /PRNewswire/ — The latest edition of the Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Chartered Accountants) and IMA® (Institute of Management Accountants) found that confidence in the economic outlook remained well below the median value over the past decade due to fears of inflation and a business slump.
The third quarter 2022 GECS, the largest regular economic survey of accountants worldwide, can be accessed here. The investigation took place between September 2 and 14, 2022 and collected 905 responses.
Globally, the survey found that nearly three-quarters of businesses are grappling with rising costs, with the highest proportion of respondents reporting increased cost pressures over the past decade. and more than one in three worrying about falling incomes, with a similar proportion pointing to exchange rate volatility. as uncertainty and glimpses of recession dominate the latest economic outlook.
Two developments underscored the precarious nature of the business environment. First, an increase in the number of respondents reporting “problems getting prompt payment”, which reached its highest level in four years. This could be the first sign of an increase in the number of organizations likely to experience cash flow difficulties. In addition, the survey found there has been a notable increase in the number of people reporting ‘problems accessing finance’, the most aggressive monetary policy tightening in 40 years likely to affect liquidity. companies.
The data further indicates that confidence in the economic outlook remains well below the median over the past decade, while the other three indicators that are more closely tied to economic activity – new orders, capital spending and employment – all show further deterioration. Overall, the series is consistent with a slowdown in global growth for the rest of the year, coupled with rising inflationary pressures.
“Growing concern about rising interest rates in response to higher inflation and the outcome of policy tightening raises the risk that the global economy will slow more than businesses expect in 2023. “, said Doctor josh henirosenior director of South East Asia at the IMA. Commenting on the prospects of Asia Pacifiche added, “The silver lining in the Asia Pacific market is that monetary policy has remained accommodative where the surge in inflation is within acceptable parameters relative to other regions, which could be why we are seeing a boost in confidence among our respondents.
The survey also notes the growing divergence in trust levels across regions, with low levels in North America and Western Europe contrasting with the more optimistic outlook of respondents from the Middle East and South Asia.
“Our latest survey of global economic conditions indicates clear continuing challenges in the global economy, reflecting the continued economic fallout from the Russian invasion in Ukrainefurther monetary policy tightening in key jurisdictions and a cost of living crisis,” Jamie Lyonshead of skills, sectors and technologies at ACCA said. “One of the main risks will be to what extent and how quickly central banks will seek to tighten monetary policy further in the coming months to rein in inflationary pressures, and whether or not the global economy may slow further. than business leaders anticipate in 2023.”
ACCA (Association of Chartered Certified Accountants) is the global body for professional accountants.
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About the IMA® (Institute of Management Accountants)
IMA® is one of the largest and most respected associations dedicated exclusively to advancing the management accounting profession.
Globally, IMA supports the profession through research, CMA® (Certified Management Accountant) and CSCA® (Certified in Strategy and Competitive Analysis) programs, continuing education, networking and promotion of the most ethical business practices. high.
Twice named professional body of the year by The Accountant/International Accounting Bulletin, IMA has a global network of approximately 140,000 members in 150 countries and 350 professional and student chapters. Based at Montvale, New JerseyUnited States, IMA provides localized services in its four global regions: the Americas, Asia Pacific, Europe and Middle East/India. For more information about IMA, please visit www.imanet.org.
SOURCE Institute of Management Accountants