Accountants and finance professionals exhibit heightened confidence in the global economy, surpassing levels seen since Q2 2023. According to the latest ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) Global Economic Conditions Survey (GECS), there has been a moderate uptick in confidence, placing the index just above its historical average. Additionally, there have been slight increases in both the New Orders and Employment indices, both of which are slightly above their averages, painting a positive picture of a gradually improving economic landscape. However, the Capital Expenditure Index experienced a slight decline, remaining below average.
Encouragingly, confidence has risen in most regions, with the Asia Pacific seeing the third-largest increase on record. This could be attributed to growing confidence in the resilience of the U.S. economy, signs of improvement in Chinese data and the global economy at large, and possibly increasing optimism regarding Japan’s potential exit from its prolonged battle against deflation. Furthermore, the moderate rise in confidence in Western Europe suggests a gradual improvement in growth from recent quarters’ weaknesses.
On a less optimistic note, global concerns about increased operating costs have risen, although they remain below their peak in Q3 2022. Notably, concerns about costs have eased in the advanced economies of North America and Western Europe, albeit remaining elevated historically. Conversely, cost concerns have notably increased in Africa, Asia Pacific, and South Asia.
Moreover, responses from the Q1 2024 Global Risks Survey section of the GECS report highlight how economic uncertainty’s ripple effects have been exacerbated by rising geopolitical tensions and talent scarcity challenges. Respondents across all sectors and regions express feeling the impact of talent retention risks, with many describing the skills shortage as an epidemic. Additionally, cybersecurity is perceived as a significant threat, particularly with advancements in generative AI facilitating the execution of ransomware and other cybercrimes at an increasing pace.
Jonathan Ashworth, Chief Economist, ACCA, said: ‘The survey points to some improvement in global
growth. Nevertheless, while encouraging, it is no time to celebrate just yet, with the global economy
facing many risks and challenges and still set for below average growth in 2024. Moreover, the elevated level of concerns about costs suggests that the major central banks should proceed very cautiously with any monetary easing.’
The report can be accessed here.
