Global Employment Freeze Looms as Economic Confidence Plummets Among the World's Hirers
Tuesday, April 19, 2016
Stern Strategy Group
(on behalf of IMA)
Anat Gerstein, Inc.
(on behalf of ACCA)
- Latest quarterly global survey from ACCA and IMA shows business less optimistic in Q1 2016 than at any other time in the past four years; in contrast, U.S. portrait much rosier -
New York and Montvale, N.J., April 19, 2016 – The latest Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) released today found that more than half of firms globally are either cutting or freezing employment, while only 14% are increasing investment in staff. The Q1 2016 GECS survey of more than 1,200 finance professionals and more than 100 CFOs around the world can be viewed here.
The landscape in the United States is significantly rosier, the survey found, noting an improvement in business confidence during the first quarter. Though indications of the state of the American economy were mixed, the survey showed that 26% of businesses in North America were creating new jobs in Q1, up from 20% in Q4 – and representing a larger percentage than in almost any other region globally, and well above the global average of 19%.
Additionally, the proportion of North American businesses that were increasing investment in capital projects – 23% – was much higher than the global average, suggesting that the underlying health of the U.S. economy is stronger than media reports have indicated.
Raef Lawson, Ph.D., CMA, CFA, CPA, IMA vice president of research and policy, said: “Business confidence in the U.S. continues to recover, but there is a global need to innovate. After the opportunity to lower costs, benefiting from focusing on innovation was the second opportunity most identified by firms. Indeed, in a difficult global environment, firms are under as much pressure as ever – if not more – to innovate and get ahead of the competition. This can be seen in the growing number of firms citing innovation as an opportunity: 40% in Q1 2016, compared with 36% of firms in Q4 2015 and 33% in Q3 2015.”
Added Faye Chua, head of business insight at ACCA: “Take North America out of the equation and the economic picture painted by this survey isn’t a pretty one. Emerging markets are besieged. Revenues for commodities firms have collapsed since mid-2014. And business confidence in China has fallen to its lowest level since our records began. Almost half of businesses reported a drop in income in Q1. As a result, every region except North America saw a jump in the number of businesses cutting capital expenditure. With emerging economies continuing to struggle with low commodity prices and many businesses on a spending lock down, the outlook for the global economy is becoming increasingly gloomy.”
According to Faye Chua, emerging markets are suffering the most as bottom lines are squeezed.
“Wages are rising rapidly in many parts of the world and businesses are finding it harder to cope as revenues come under increasing pressure,” she said.”The sharp drop against the dollar experienced by many currencies will also have pushed up costs, making imports more expensive and raising the value of dollar-denominated debts. All this means that firms in emerging-market economies are very pessimistic about their prospects.”
ACCA and IMA share a strategic partnership, focusing on research studying the future of the global accounting profession. For more research and insights, visit The Future Today website at www.futuretoday.com.
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 178,000 members and 455,000 students in 181 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of 95 offices and centres and more than 7,110 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.
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 80,000 members in 140 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 visit www.imanet.org.