Member Article

Finance professionals see economy as "stagnating"

Confidence among finance professionals has fallen in the third quarter of 2012, as many believe the global economy is stagnating or even reversing.

The Global Economic Conditions Survey (GECS) undertaken by the Association of Chartered Certified Accountants, and the Institute of Management Accountants questioned 2,500 finance professionals worldwide.

It suggested that confidence levels were down to changing business fundamentals such as demand, access to finance, prompt payment and inflation.

Respondents in Western Europe said they had started to see the beginnings of a credible plan to resolve the region’s sovereign debt crisis.

The Middle East proved to be the most confident of the GECS regions, as 52% of respondents from the region believe the global economy is improving. Austerity measures looked to be perpetuating the want for increased spending across the US, Canada, the UK, China and Malaysia.

Raef Lawson, IMA’s Vice President of research, commented: “The slowdown in Asia; the Eurozone debt crisis; the sluggish US recovery; all are feeding into each other and no region is unaffected; in fact, the degree to which movements in the GECS indices are synchronised between regions is uncanny.”

In the UK, confidence rebounded slightly across the third quarter of 2012, as 16% of respondents reported positive feelings.

Manos Schizas, senior economic analyst with ACCA, said: “Respondents in the UK have gradually adjusted their expectations of fiscal policy over the past year, as the fragility of growth has become plain to see. While on balance they still expect austerity to hurt growth in the medium term, they now believe the UK’s trajectory is much more sustainable than they believed it to be in previous quarters.”

He added: “This quarter has seen business confidence fall for all the right reasons. Around the world, and with few exceptions, the fundamentals of the business environment are deteriorating, and businesses are once again having the kinds of liquidity problems we thought we had put behind us.”

This was posted in Bdaily's Members' News section by Tom Keighley .