The latest ACCA (Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) Global Economic Conditions Survey (GECS) indicates that confidence among accountants and finance professionals edged slightly higher in Q2 2024, just surpassing its historical average. For chief financial officers (CFOs), all key global indicators improved, with significant gains in the New Orders and Capital Expenditure indices.
However, notable regional differences emerged. Accountants in Western Europe reported another substantial increase in confidence as the euro area and UK economies continued their recovery. Asia Pacific saw a modest rise following a previous significant gain, with a strong increase in the New Orders Index, benefiting from global economic improvements, including in the manufacturing sector and the upward trend in technology. In contrast, financial professionals in North America reported a sharp decline in confidence, especially pronounced in the U.S.
Globally, the proportion of respondents reporting ‘increased costs’ decreased in Q2 but remains high by historical standards, with cost pressures elevated in all regions except the Middle East.
Top three risk priorities
The GECS also asked accountants to rank their top three risk priorities. For the first time in a year, the economy is not the top concern for respondents in financial services, although it remains a significant concern for those in the corporate sector. The Q2 survey also reveals growing challenges in cybersecurity, which ranked as the third-highest risk priority across all sectors.
Alain Mulder, Senior Director Europe Operations & Global Special Projects at IMA® said: ‘The American economy has slowed from the heady pace of expansion in the second half of 2023, and the latest results raise the risk of some further moderation over coming quarters. The probability that the U.S. Federal Reserve begins easing monetary policy after the summer has increased, although inflation developments over coming months will be crucial.’
Jonathan Ashworth, Chief Economist, ACCA, said: ‘The GECS points to some further improvement in the global economy in Q2. Further signs of a pickup in the important Western European and Asia Pacific regions are encouraging, although the decline in the North American and U.S. indices bear watching closely.’
Confidence levels varied by region, being significantly higher than the historical average in Asia Pacific, slightly above average in the Middle East and Western Europe, at the average in South Asia, slightly below average in Africa, and well below average in North America.
Ashworth concluded: ‘Despite the resilience of the global economy so far in 2024, many important downside risks and challenges remain. Sticky inflation could limit central banks’ scope for monetary easing, while geopolitical and political risks remain very elevated and will continue to create significant uncertainty.’
Read the full report here.
