The latest Global Economic Conditions Survey ( GECS ) conducted by the Association of Chartered Certified Accountants ( ACCA ) and the Institute of Management Accountants ( IMA ) indicates a continued dip in confidence among accountants worldwide for the third consecutive quarter in Q4 2023. This decline aligns with a broader trend of moderated global growth, although the survey does not indicate a significant impending downturn.
The GECS findings reflect varied changes in confidence levels across different regions. Notably, North America experienced a robust rebound in confidence following a significant drop in Q3, while improvements were observed in South Asia and the Middle East.
In contrast, Western Europe witnessed a third consecutive quarter of declining confidence, and the Asia Pacific region recorded a notable decrease, possibly reflecting concerns about China’s recovery. Confidence in Africa also plummeted sharply, offsetting gains made earlier in 2023.
Despite concerns among accountants about the potential insolvency of customers or suppliers, the survey suggests that the current levels are not alarmingly high when viewed through historical standards. However, with a rise in corporate bankruptcies and tightening monetary policies, it wouldn’t be surprising if concerns elevate in 2024.
Examining the risks identified by global accountancy professionals, economic risks, talent retention, and regulatory change emerged as their top three priorities. This marks a shift from 12 months earlier when regulatory change took the lead, followed by cybersecurity and economic risks. Geopolitical risks have notably climbed in priority, with financial services professionals viewing them through the lens of cybersecurity, while those in the corporate sector perceive them as ‘business-critical’ risks, such as potential supply chain disruptions.
ACCA Chief Economist Jonathan Ashworth commented on the survey, noting a slight easing of concerns among accountants about increased costs. However, he emphasised that these concerns remain elevated by historical standards, hinting at potential risks if financial market expectations are too optimistic about the timing and magnitude of central bank rate cuts in 2024, reported ACCA Global.
Susie Duong, IMA Senior Director of Research and Thought Leadership, concluded that the substantial rise in confidence in North America brings it close to its long-term average, possibly reflecting increased confidence in the U.S. Federal Reserve’s ability to orchestrate a soft landing in 2024. However, she pointed out that the employment index fell sharply, coupled with a moderate decline in capital expenditure and new orders, indicating cautious business expansion sentiments pending a clearer economic performance outlook.
ACCA is the Association of Chartered Certified Accountants, established in 1904 is a globally recognized professional accountancy body that offers qualifications and promotes standards in accountancy on a global scale. Currently, it supports a diverse community of over 247,000 members and 526,000 future members in 181 countries.
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