Accountants' Confidence in Q3 2022: A Story of Pessimism with a Few Bright Spots Amid Volatile Business Environment, Fears Over Inflation

North American confidence recovers slightly in Q3, but still second weakest in survey's history

SINGAPORE, Nov. 7, 2022 /PRNewswire/ -- The latest edition of the Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and IMA^® (Institute of Management Accountants) found confidence in the economic outlook remaining well below the median reading over the past decade due to fears over inflation and a slump in business.

The Q3 2022 GECS, the largest regular economic survey of accountants around the world, can be accessed here. The survey took place between September 2 and 14, 2022 and gathered 905 responses.

Globally, the survey found that nearly three-quarters of businesses are wrestling with increased costs, with the highest proportion of respondents reporting increased cost pressures for the last decade and over one in three worried about decreased income, with a similar proportion highlighting foreign exchange volatility as uncertainty and glimpses of recession dominate the latest economic outlook.

Two developments underlined the precarious nature of the commercial environment. First, an increase in the number of respondents reporting "problems securing prompt payment," which has risen to the highest level in four years. This could be the first sign of an increase in the number of organizations that may be experiencing cash-flow difficulties. Additionally, the survey found that there has been a noticeable rise in the numbers reporting "problems accessing finance," with the most aggressive tightening of monetary policy in 40 years likely to hit corporate liquidity.

The data further notes confidence in the economic outlook remaining well below the median reading over the past decade, while the other three indicators that are more closely related to economic activity – new orders, capital expenditure, and employment – all show a further deterioration. Taken as a whole, the series is consistent with slower global growth for the remainder of the year, coupled with inflationary pressures rising.

"Growing concern of increased interest rates in response to higher inflation and the result in tightening policy lies the risk where the global economy could slow more than businesses expect in 2023," said Dr Josh Heniro, senior director of Southeast Asia at IMA. Commenting on the outlook for the Asia Pacific, he added, "The silver lining in the Asia Pacific market is that monetary policy has remained accommodative where the surge in inflation is within acceptable parameters in comparison with other regions, which could be the reason why we are seeing a recovery of confidence among our respondents."

The survey also notes the growing divergence in confidence levels across the regions, with low levels in North America and Western Europe contrasting with the more upbeat perspective among the survey's Middle Eastern and South Asian respondents.

"Our latest Global Economic Conditions survey points to obvious ongoing challenges in the global economy, a reflection of the continued economic fallout from the Russian invasion in Ukraine, a further tightening of monetary policy in key jurisdictions, and a cost-of-living crisis," Jamie Lyon, head of skills, sectors and technology at ACCA said. "One of the key risks will be how much and how quickly central banks will seek to further tighten monetary policy in the months ahead to tame inflationary pressures, and whether or not the global economy could slow more than business leaders expect in 2023."

About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants.

We're a thriving global community of 241,000 members and 542,000 future members based in 178 countries and regions, who work across a wide range of sectors and industries. We uphold the highest professional and ethical values.

We offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. Our qualifications and learning opportunities develop strategic business leaders, forward-thinking professionals with the financial, business and digital expertise essential for the creation of sustainable organizations and flourishing societies.

Since 1904, being a force for public good has been embedded in our purpose. In December 2020, we made commitments to the UN Sustainable Development Goals which we are measuring and will report on in our annual integrated report.

We believe that accountancy is a cornerstone profession of society and is vital helping economies, organizations and individuals to grow and prosper.

And through our cutting-edge research, we lead the profession by answering today's questions and preparing for the future. We're a not-for-profit organization. Find out more at accaglobal.com

About IMA^® (Institute of Management Accountants)
IMA^® 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) and CSCA® (Certified in Strategy and Competitive Analysis) programs, continuing education, networking, and advocacy of the highest ethical business practices.

Twice named Professional Body of the Year by The Accountant/International Accounting Bulletin, IMA has a global network of about 140,000 members in 150 countries and 350 professional and student chapters. Headquartered in Montvale, N.J., USA, IMA provides localized services through its four global regions: The Americas, Asia/Pacific, Europe and Middle East/India. For more information about IMA, please visit www.imanet.org.