Brexit Uncertainty is a Key Threat to Fragile Global Business Confidence New ACCA and IMA Report Shows

Taylor Fenske
Stern Strategy Group
(on behalf of IMA)
(908) 325-3866

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

- Latest quarterly global survey finds business confidence in the United States edged up during the second quarter of 2016; reveals a subdued global sentiment, with many more firms scaling back investment -

New York and Montvale, N.J., July 20, 2016 – The latest Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) released today shows that business confidence in the United States edged up during the second quarter of 2016 (having hit a four-year low during the first quarter) and is now at its highest level in a year. The report can be viewed at:

The Q2 2016 GECS survey of more than 1,250 finance professionals and more than 130 Chief Financial Officers around the world also presents an early indication of how uncertainty will affect OECD (Organization for Economic Cooperation and Development) economies, with business confidence subdued despite an improving global outlook.

“Fears of global recession seem to have eased over the past quarter as China’s currency stabilizes, the United States enjoys a consumer-led recovery, and commodity prices have started to rise,” said Faye Chua, head of business insight at ACCA. “Yet, low levels of confidence across Europe in the run-up to the United Kingdom referendum has offset some of those fragile gains as jittery markets from the United States, United Kingdom, and across the emerging world suffer decline.”

Outside of Europe, there had been cautious grounds for optimism in business confidence.

Raef Lawson, Ph.D., CMA, CFA, CPA, IMA vice president of research and policy, said: “The improvement was driven by non-OECD economies. Commodity-producing economies in particular have benefited from recent price rises with optimistic expectations of government spending in Africa and the Middle East, where governments are reliant on commodity revenues.”

The number of firms that said their prospects have deteriorated over the past three months fell to 43% in Q2, from 48% in Q1. Yet, the prevailing mood is still far from bright. Although there has been a slight rise in confidence, it is yet to translate into meaningful increases in capital expenditure and employment indices. Globally, half of firms are still either cutting or freezing employment, while only 13% are increasing investment in staff. Only 16% of businesses reported they are increasing investment in capital projects, compared with 41% that said they are reducing it.

In the United States, the new GECS showed that business confidence edged up during the second quarter of 2016 (having hit a four-year low during the first quarter) and is now at its highest level in a year. More businesses (14%) in North America saw an opportunity to increase orders in Q2.

The survey found that, in North America, confidence edged down slightly in Q2 though the mood remained more upbeat than in most other regions. Though 38% of businesses said they were less optimistic than three months earlier – up from 36% in Q1 – that was still below the 43% global average.

Businesses in North America also reported stronger intentions for employment and investment; fewer firms in North America than in any other region reported plans to freeze or cut jobs, and the 26% of businesses planning to increase employment was higher than any other region.

Chua anticipates the potential impact of Brexit will be felt: “It would not be a surprise if business sentiment fell again in Q3. And the potential for long-term uncertainty as the United Kingdom negotiates its complex departure from the European Union could weigh down on global confidence for some time to come.”

Fieldwork for the Q2 2016 GECS took place June 3-20, and drew responses from ACCA and IMA members around the world. Nearly half the respondents were from small and medium enterprises, with the rest working for large firms of more than 250 employees.

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 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. For more information about ACCA, please visit

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

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