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Portfolio > Economy & Markets > Economic Trends

Accountants Feel Global Recovery Is Faltering

By Danielle Andrus

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A survey by the Association of Chartered Certified Accountants released Wednesday found the number of accountants worldwide who feel the global economic recovery is starting to decline increased in the fourth quarter, doubling from 14% in the third quarter to 28%.

Less than one-third of respondents said they believe economic conditions are improving or will improve soon, compared with 47% in the third quarter who were optimistic about economic conditions. Consequently, accountants are pessimistic about their own businesses. Thirty-eight percent say they have lost confidence in their organizations, up from 28% in the third quarter, and 37% say they don't feel any more or less confident.

"The issue for finance professionals for some time now has been the question of whether the economy, which had been showing signs of recovery, had taken a pause for breath or was about to take a downturn," Manos Schizas, senior policy advisor with ACCA, said in a press release. "The findings of this survey suggest that finance professionals think the downturn is now the more likely scenario."

The SME sector appears to be the most resilient, according to the survey, followed by the private, non-financial sector; however, the survey noted there has been a "significant drop in confidence" for accountants who work at large financial services companies. Confidence among public sector accountants fell to levels lower than those seen during the "depths of the downturn" and loss of confidence "continues to accelerate."

Reasons for the decline, according to the ACCA, are the economic crises in Europe, though accountants' perceptions of government could be at play, as well. Thirty-eight percent of respondents rated their government's reaction to economic conditions as "poor" or "very poor," compared with 33% in the third quarter. Just over one-quarter of respondents rated their government's response positively, down slightly from 27% in the third quarter.

The survey found accountants' outlook for investment fell in the fourth quarter, as well. Late payments and insolvencies increased, and businesses are putting off making decisions until the economic outlook is clearer, according to the survey. Just 8% of accountants reported an increase in investment, though the percentage of respondents reporting a decline in staff or capital investment fell slightly to 37% from 38%.

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