Economic Confidence Among Finance Professionals Hits Highest Level Since First Half Of 2023

Accountants and finance professionals are more confident in the global economy than they have been since Q2 2023. The latest ACCA (the Association of Chartered Certified Accountants) and IMA^® (Institute of Management Accountants) Global Economic Conditions Survey (GECS) saw a moderate increase in confidence to put the index just above its historical average. Add in small increases to the New Orders and Employment indices – both of which are slightly above their averages – and a positive picture emerges of a gradually improving economic outlook. That said, there was a small decline in the Capital Expenditure Index, which remains below average.

Encouragingly, there were gains in confidence in most regions. The rise in Asia Pacific was the third largest on record and may reflect growing confidence in the resilience of the U.S. economy, signs of improvement in the Chinese data and wider global economy, and perhaps rising optimism that Japan may finally be exiting from its decades long battle against deflation. The moderate rise in confidence in Western Europe also suggests that growth may be gradually improving from the weakness of recent quarters.

“In the Middle East, confidence fell slightly in Q1, but remained above its historical average, and there was a decent increase in the New Orders Index, which is at its second-highest level in the survey’s history. There was also a modest improvement in the Employment Index, which is well above its average. Less encouragingly, the Capital Expenditure Index declined, although it is still just above average. Overall, the key indices remain indicative of an upbeat picture for the region,” said Fazeela Gopalani, Head of Eurasia and Middle East, ACCA.

Stronger growth in the Saudi Arabian economy in 2024 is likely to be a key positive. The Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) is consistent with strong growth in the non-oil private sector, and the economy will continue to benefit from the Saudi Vision 2030 plan for diversification from the oil sector. Meanwhile, oil prices have firmed since late last year. If improvements in global economic activity generate increases in demand and further price gains, that would clearly be positive for the region. Nonetheless, geopolitics remains a major downside risk.

Q1 2024 responses from the Global Risks Survey section of the GECS report demonstrate how the ripple effects of economic uncertainty have been exacerbated by rising geopolitical and talent scarcity challenges. Respondents across all sectors and regions said that they are feeling the impact of talent retention risks, with numerous respondents describing the skills shortage as an epidemic. Cybersecurity is also viewed as a significant threat, especially with advancements in generative AI making ransomware and other cybercrimes increasingly easier and quicker to carry out.

Jonathan Ashworth, Chief Economist, ACCA, said: “The survey points to some improvement in global growth. Nevertheless, while encouraging, it is no time to celebrate just yet, with the global economy facing many risks and challenges and still set for below average growth in 2024.

Moreover, the elevated level of concerns about costs suggests that the major central banks should proceed very cautiously with any monetary easing.”

Susie Duong, PhD, CMA, CPA, CIA, EA, Senior Director of research and thought leadership at IMA, said: “The continued improvement in confidence in North America, and the rise in the other indicators, likely reflects growing optimism that the U.S. economy is on course for a ‘soft landing’ or perhaps no landing at all in 2024. That would clearly be welcome news for businesses, although it means we are likely to see less monetary easing by the Federal Reserve this year than investors expected a few months ago.”