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Global Business Confidence Dropped in Fourth Quarter, Report Finds

January 31, 2013

Marc Gerrone
(201) 474-1502

Andrew Healy
Water & Wall Group
(212) 699-3671

ACCA and IMA Global Survey of Finance Professionals Cites Concerns over Government Spending

New York and Montvale, N.J., January 31, 2013 – According to the latest quarterly survey of domestic and international finance professionals, global business confidence dropped marginally in the fourth quarter of 2012, raising the spectre of more instability for 2013. These findings are detailed in the Q4 2012 Global Economic Conditions Survey conducted by ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants).

Forty-three percent of respondents reported decreased levels of business confidence, up from 41 percent in Q3, while only 19 percent reported improved confidence levels. Meanwhile, 30 percent of respondents said the global economy was on course for recovery, up from 29 percent in Q3. Sixty-five percent believed it was stagnating or deteriorating, down from 67 percent.


The findings also reveal the mood of U.S. business across the regions remains gloomy, broadly in line with the global average. Forty-three percent of respondents reported loss of confidence in their businesses’ prospects over the past three months, versus 20 percent who reported confidence gains.


The South and Midwest states have lost the most confidence, and, in fact, have seen a negative trend for an entire year. The West and Northeast performed better in early 2012, but have since followed the rest of the U.S. into negative territory. Only the mid-Atlantic, where confidence was lowest to begin with, has seen more stability in the last three months.


Emmanouil Schizas, senior economic analyst at ACCA, said, “Global business confidence and perceptions of the global economy are tightly correlated and it’s unusual for these two indicators to move in opposite directions. The last time this happened was in early 2010, when the global recovery first started running out of steam.”


Raef Lawson, Ph.D., CMA, CPA, vice president of research at IMA, observed, “Perceptions of the U.S. economy in the last six months have been dominated by politics, notably the presidential election and the Fiscal Cliff. Responses to our survey clearly demonstrate the effects of this, with some respondents saying explicitly that they feel polarization and uncertainty are hurting the U.S. economy. This is evident in the behavior of businesses, with capital spending and job creation falling throughout the last six months and U.S. respondents reporting fewer opportunities for their organizations across the board.”


Mr. Schizas added, “There is no other major market in which respondents have such a negative view of fiscal policy, and are so concerned about the level of government spending, and there is no doubt this is weighing on both business confidence and optimism about the global recovery.”


Looking ahead Mr. Schizas concluded, “Going into 2013 there are reasons to be optimistic. Rising global employment levels, a potential end to the slowdown in China, lower volatility in Europe and a temporary resolution to the U.S. fiscal cliff crisis should all positively impact the global economy in the year ahead.”


About the Survey

This is the 16th edition of the Global Economic Conditions Survey and the fifth carried out jointly by ACCA and IMA. Fieldwork took place between November 29 and December 19, 2012, attracting 1,994 responses from finance professionals globally, including 640 senior managers and directors (and, within those, 154 CFOs). It is the largest global quarterly economic survey of accountants both in terms of the number of respondents and the scope of economic variables it monitors. For full survey results please contact Marc Gerrone (mgerrone@imanet.org) or Andrew Healy (ahealy@waterandwallgroup.com).


About ACCA (Association of Chartered Certified Accountants)

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants with 154,000 members and 432,000 students in 170 countries worldwide. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We work through a network of over 80 offices and centres and more than 8,400 Approved Employers worldwide, who provide high standards of employee learning and development. For more information about ACCA, please visit http://www2.accaglobal.com/usa/.


About IMA® (Institute of Management Accountants)

IMA®, the association of accountants and financial professionals in business, is one of the largest and most respected associations focused exclusively on advancing the management accounting profession. Globally, IMA supports the profession through research, the CMA® (Certified Management Accountant) program, continuing education, networking, and advocacy of the highest ethical business practices. IMA has a global network of more than 65,000 members in 120 countries and 200 local chapter communities. IMA provides localized services through its offices in Montvale, N.J., USA; Zurich, Switzerland; Dubai, UAE; and Beijing, China. For more information about IMA, please visit http://www.imanet.org.


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Source: www.imanet.org

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