U.S. Business Confidence Rises Despite Challenging Conditions
Wednesday, April 30, 2014
Stern + Associates
(on behalf of IMA)
(908) 276-4344 x208
Anat Gerstein, Inc.
(on behalf of ACCA)
New York and Montvale, N.J., April 30, 2014 – Business optimism and confidence in the United States economy improved in the first quarter of 2014 despite concerns over dangerous levels of government spending and a lack of investment opportunities, according to findings from the ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants). To view the full report, visit: http://bit.ly/1iIoJU1.
The 21st edition of the Global Economic Conditions Survey (GECS), the largest regular economic survey of accountants in the world, showed that economic conditions in the U.S. did not reflect a more optimistic outlook. According to the report, 60 percent of the 1,772 respondents were optimistic about the state of the economy (up from 50 percent in late 2013) and 25 percent reported rising confidence in their own organizations (up 23 percent). U.S. respondents were also marginally more positive about government policy, despite increased fears of dangerous levels of government overspending over the next five years. “What appears to be driving U.S. business confidence among finance professionals is better financing conditions: Access to growth capital has been improving throughout the past year,” says Emmanouil Schizas, ACCA Senior Economic Analyst. “Finance professionals reported business investment slowed marginally, breaking a year-long, rising pattern. Additionally, respondents reported greater price and exchange rate volatility than at any point in 2013.”
Future industries that are research and technology-intensive performed well and boosted U.S. business confidence. However, GECS found evidence of worrying conditions in other sectors. The year-long rally in manufacturers’ business confidence has ended. Simultaneously, confidence in the retail, wholesale and distribution sectors fell for a third consecutive quarter, prompting a steep fall in capital spending. “This could be a signal of weakening consumer spending,” says Schizas. “Whether it continues throughout 2014 will be telling for the U.S. economy.”
Flawed and Fragile Global Recovery
Globally, 30 percent of respondents around the world are more confident about the prospects of their organizations than they were three months earlier, a figure unchanged since late 2013. Conversely, just 31 percent reported a loss of confidence, down from 34 percent in late 2013.
According to Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research, “These are the best business confidence readings since the inaugural GECS in 2009. This should be encouraging, but our analysis of the influence of fundamentals on business confidence suggests the economic recovery is flawed and fragile. “Since early 2013, global business confidence has become increasingly dependent on price and exchange rate stability. This is a sign of building financial turbulence and has accelerated dramatically in early 2014. Financial stability is now a more significant contributor to business confidence than cash flow and demand. Expectations of government spending and ratings of government policy became more significant contributors in early 2014, suggesting that the recovery has been hollowed out and is now over dependent on policy.”
The ACCA and IMA joint website, roleofcfo.com, is a resource for finance leaders containing ACCA and IMA reports, research and insights.
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We support our 162,000 members and 428,000 students in 173 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of 91 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence. www.accaglobal.com
About IMA® (Institute of Management Accountants)
IMA®, the association of accountants and financial professionals in business, 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) program, continuing education, networking, and advocacy of the highest ethical business practices. IMA has a global network of more than 70,000 members in 120 countries and 300 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/Africa. For more information about IMA, please visitwww.imanet.org