Global economic confidence at a record low: pessimism ends a turbulent 2018

    28/01/2019

Global economic confidence fell for the third consecutive quarter in Q4 2018, ending the year at an all-time low finds the latest edition of Global Economic Conditions (GECS) from ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants).

The global poll of 3,800 accountants shows that all key regions recorded a negative confidence score with signs of growth weakening in the world’s three biggest economies - the US, China and the Eurozone.

The survey reveals respondents to be pessimistic about the outlook ahead, with the lowest scores recorded in Western Europe and the Caribbean. The least pessimistic part of the global economy was again South Asia, followed by Africa and North America.

GECS Q4 shows:

• the biggest concern for respondents was again rising costs, with 55% citing this as an issue;
• 47% of respondents globally are considering laying off staff, with just 18% considering taking on new workers;
• 39% of respondents are considering scaling back investment in new capital projects, compared with just 16% who are looking to increase investment in new projects;
• the possibility of suppliers going out of business being a concern for just 12% of respondents – unchanged from Q3.

Narayanan Vaidyanathan, head of business insights at ACCA said of the global results: ‘Economic confidence over 2018 has been turbulent, with end of calendar year results downbeat compared to the start of 2018. It’s been interesting to look back at the GECS from the start of 2018, when we recorded economic confidence at its highest since the first survey was issued assessing Q1 2009. Last year was clearly a roller-coaster ride and the outlook for 2019 is also uncertain.’

Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy added:  ‘The US’s economic confidence is now at an all-time low with signs that domestic demand is starting to slow, owing to a combination of higher interest rates and the waning impact of the recent fiscal stimulus. But the jobs market remains extremely buoyant which will underpin robust consumer spending in coming months. Despite this, we do not envisage a recession in the States despite confidence declining and trade tensions with China continuing. Looking ahead, we believe that global growth to hold up above 3% this year.’

GECS Q4 2018 can be found online at: https://www.accaglobal.com/gb/en/professional-insights/global-economics/gecs-q4-2018.html

Fieldwork for the Q4 survey took place between 23 November and 7 December 2018 and attracted 3773 responses from ACCA and IMA members around the world, including 302 CFOs.