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IMA and ACCA Release GECS Q2 Report

The latest Global Economic Conditions Survey (GECS) from IMA® (Institute of Management Accountants) and ACCA (the Association of Chartered Certified Accountants) finds that business confidence in the U.S. has fallen and is now at its lowest level since the last quarter of 2016. However, the quarterly report–the largest regular economic survey of accountants in the world—found that the longer-term outlook is more positive with healthy levels of employment and consumer spending. View the GECS Q2 report here.

“The drop in confidence comes amid challenges for the new administration in its first year in office; the planned stimulus package of tax cuts and infrastructure spending is likely to be delayed until 2018 at the earliest, as the government continues to focus on healthcare reform,” said Narayanan Vaidyanathan, senior business analyst at ACCA. “As a result, businesses are uncertain about the short term.”

He added, “However, the survey also shows that fundamentals driving longer term prospects still look encouraging: the employment index is relatively high and excluding the fall compared to the previous quarter, is above levels seen since the last quarter of 2015. Coupled with reasonable real wage growth, a longer-term uptick looks a realistic prospect.”

This expected growth in the U.S. economy has had a positive result on several other economies covered by the GECS survey.

U.S. companies cited rising costs as their main concern (45% of respondents), followed by decreased income (35%). The least cited reasons for concern were customers going out of business (14%) and supplies going out of business (6%).

Raef Lawson, CMA, CPA, Ph.D., IMA vice president of research and policy, said, “A combination of this consumption growth driving recovery in the U.S. and a gentler than expected slowdown in China has led to a fairly positive global outlook for this quarter. The IMF recently upgraded its forecasts for global growth to 3.5% in 2017 and 3.6% in 2018, up from just 3.1% last year. Given the improving outlook, this is looking achievable.”

Overall, despite very low unemployment rates across large parts of the developed world, inflation remains subdued, the report noted. The outlook for the global economy is promising, with all of the main economies set for decent growth over the next few years. Although a large-scale fiscal stimulus (in the form of tax cuts and increased spending on infrastructure) in the U.S. is looking less likely, the U.S. economy should continue to perform well, helped in large part by a strong employment market.

Fieldwork for the Q2 2017 GECS took place between June 2 and 29, 2017 and attracted 965 responses from ACCA and IMA members around the world, including more than 89 CFOs.