The latest Global Economic Conditions Survey (GECS) from IMA^® (Institute of Management Accountants) and ACCA (the Association of Chartered Certified Accountants) found that economic confidence in the United States increased during Q3 2019 but still remained at very low levels and close to an all-time low. Other report findings point to the significant risk that the U.S.-China trade war poses to the global economy.

GECS is the largest regular economic survey of accountants around the world, in terms of both the number of respondents and the range of economic variables it monitors. The full report is available here.

The survey revealed a slight uptick in confidence in the U.S. and U.K., which came amid a significant global drop to the lowest level in nearly eight years (with the largest drops in Asia Pacific and South Asia) while the global orders index remained at its lowest level since Q3 2016 – all pointing to an intensifying global slowdown in 2020, the report notes.

Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy said, “The evidence so far of a significant slowdown in the real economy is mixed – investment has weakened but the consumer is relatively buoyant. The GECS orders index is consistent with GDP growth of between 1% and 1.5% annually through into 2020.”

Lawson added, “But confidence is still at a very low level, close to the all-time low, undermined by the trade war with China and a slowing global economy. Our view remains that a U.S. recession is highly unlikely, either this year or in 2020.”

Noted Warner Johnson, head of ACCA USA, “Fears of a global recession are mounting as the world economy and trade slows and as well-documented risks become elevated. Risks are on the downside, but a global recession is still unlikely, given the strength of the jobs market in many developed economies.”

To date, the report notes, the U.S. economy has held up reasonably well, despite the fading effect of the 2018 fiscal boost. Interest rate cuts by the U.S. Federal Reserve have been presented more as a way of maintaining robust economic activity and acting as an insurance policy against the risks facing the global economy. 

Fieldwork for the Q3 2019 GECS took place between August 30 and September 13 and attracted responses from 1,128 ACCA and IMA members around the world, including more than 100 CFOs.

For more information on the Global Economic Conditions Survey, visit IMA's website.