More Accountants say Global Economy is Deteriorating
Canaries in the coalmine? A survey of accountants around the world finds that an increasing minority of them believe the global economy is deteriorating.
The Association of Certified Chartered Accountants Global Economic Conditions Survey’s recovery index recorded its first –barely– positive value in the second quarter of 2010. Almost half of our sample (48.2%) now believe that conditions are either improving or about to, up from 46% in early 2010. Almost exactly the same percentage (48.1%) believe conditions are stagnating or deteriorating.
Perhaps more importantly, ACCA says, the risk outlook for the global economy is deteriorating, with concerns about sovereign debt in Europe weighing down on respondents’ expectations.
For the first time since these surveys began (in Q1 2009) the percentage of respondents saying that the global economy is deteriorating increased, reaching 14%. Additionally, the percentage of those who say they are unsure as to where the global economy is headed reached its highest level yet.
On the other hand, accountants’ confidence in their organisations has risen again in the last quarter, and at a faster pace than in early 2010. While the largest share of respondents (40%) reported no changes in their confidence levels, the share of those reporting gains in confidence rose from 33% in early 2010 to 36%.
For the public sector in developed countries, there has simply been no recovery from the financial crisis. Confidence has been falling at an accelerating pace since early 2009, although the latest survey reveals a slightly improved outlook. On the other hand, public sector finance professionals in the developing world have enjoyed a respite during the last 12 months, but are now once again losing confidence.
In the private sector, large corporates and large financials saw conditions bottom out as early as the spring of 2009 and are, despite recent adverse developments, recovering quite fast. Small and medium-sized enterprises (SMEs), on the other hand, have plotted a middle course between the other sectors and their recovery has been slowing since late 2009.
Full survey results available here.
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