5th August 2013
The second quarter of 2013 is proving to be a key turning point for both the economy and the business confidence according to global survey of conducted by two accountancy organisations.
The Global Economic Conditions Survey is carried out by the Association of Chartered Certified Accountants and the Institute of Management Accountants and received 1,833 from the organisations’ members globally.
In the second quarter, some 47% of respondents felt that the state of the economy was improving or about to do so, up from 43% in the first quarter.
While that still left 50% who were pessimistic, the authors note that this is highest level of optimism in two years and is “supported by a stream of improving economic data and positive news about the global and national economies”.
The GECS business confidence index inched higher in the second quarter with 26% of respondents reporting increased confidence in the prospects of their organisations up from 24%. This contrasts with warnings about unwarranted optimism in the previous quarter.
Some 26% of respondents reported that their organisations had access to value-added opportunities and were not considering cost cutting and though this is a relatively low figure, it is still at a record high for the last two years.
Businesses are also seeing improved access to capital with the exception of mainland China and Ireland, with monetary stimulus seen as the most significant cause.
Emmanouil Schizas, senior economic analyst at ACCA and the editor of the GEC Survey, says: “This is not a recovery for everyone, but for significant parts of the world it looks like the real thing. If this new found dynamism persists beyond a couple of quarters it could build its own momentum independent of monetary policy.”
However respondents increasingly expect that a number of ‘big spenders’, led by China, Russia, and the US, will tighten their fiscal policies over the next five years.
Schizas says: “These three countries alone represent about 37% of world GDP, while respondents there don’t expect their governments to embrace austerity, even a small medium-term deceleration in government spending is likely to have a significant global impact.”
“While business confidence may be strong at the global level, the level of optimism is not shared evenly across the regions. Only North America and Africa appear to be experiencing a genuine and indisputable economic recovery.
“Concerns about the state of the economic recovery and the health of the banking sector in China impacted on the wider Asia Pacific region. In the Middle East, Western Europe and the Caribbean, respondents felt more optimistic about the recovery than in the previous quarter, but less optimistic about the prospects of their own businesses. On the other hand, in South Asia and Central and Eastern Europe, there are signs of a renewed downturn.”