Economic Slowdown Poised to Continue to Dominate International Business Landscape

Anjelica Sena
Stern Strategy Group
(908) 325-3873

Jeff Simmons
Anat Gerstein, Inc.
(on behalf of ACCA)
(917) 673-0024

Job cuts, low investment and finance tougher to come by, says global survey

New York and Montvale, N.J., February 3, 2016 – Falling income is the biggest concern for global businesses, according to the latest and largest regular global survey of finance professionals. Nearly half of businesses (46%) reported a decline in earnings in the fourth quarter of 2015 in the final Global Economic Conditions Survey (GECS) of last year carried out by ACCA (the Association of Chartered Certified Accountants) and IMA (the Institute of Management Accountants). The GECS report can be viewed online at

The survey of more than 2,500 finance professionals and more than 200 CFOs around the world also shows that business confidence has hit rock bottom, where 44% of respondents were less confident than three months earlier. 

Businesses not only reported a fall in income, but also more difficulty in accessing finance, with half of them cutting their workforce or putting a recruitment freeze in place, and 40% saying they had cut back investment plans since the third quarter of 2015.

The United States economy continues to perform relatively well, even if business confidence was undermined last quarter by the strength of the U.S. dollar and the prospect of a rate hike. Data showed the U.S. economy grew by a relatively healthy 2.1% in Q3, retail sales continued to expand in October and November, and auto sales hit a record high for the year. Moreover, concerns that the labor market was losing momentum were eased by strong employment gains. In October to December, non-farm payrolls increased by an average of 284,000 a month, up from an average of 174,000 in the third quarter.

“Despite this overall good news, there is a clear divergence within the U.S. economy,” said Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy. “While domestic-oriented sectors have benefited from the strong labor market and U.S. dollar, the manufacturing and energy sectors continue to perform poorly, in part due to oil prices.”

Confidence remained especially weak in emerging economies. China’s slowdown is affecting business confidence around the world and contributing to serious problems in other major emerging economies, especially those that rely on commodity exports, such as Brazil and Russia. 

As the price of oil continues to tumble the producers that were relatively well prepared for a drop in energy prices, like Saudi Arabia and the UAE, are now facing weaker growth as governments turn their attention to repairing their finances. More than 60% of respondents in the region reported they had cut back on investment and employment. Businesses in OECD economies are more upbeat. Most advanced economies are net importers of energy and have benefitted from declines in oil prices. 

The most significant improvement in business confidence was in the eurozone, where the risk of a near-term break-up of the currency area has faded into the distance after the latest Greek bailout. 

Rising costs were still a problem, with 40% of businesses reporting concerns. While commodity prices have fallen, firms in many parts of the world, particularly Asia and Africa, are still having to deal with rapidly rising wages. 

Faye Chua, head of business insight at ACCA, said: “There is a troubling long list of risks developing for the majority of global businesses. Many are already, unsurprisingly, reacting to falling opportunities by scaling back on capital and employment  investments, which will, in turn, contribute to the further slowdown of the global economy. Combined with the fact that many governments are having to cut back on spending, there are grounds for concern.”  

About ACCA
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 92 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

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