New ACCA and IMA Report: Global economic confidence drops slightly in Q2 2019, still above record low reached at end of 2018

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

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

New York and Montvale, N.J., July 18, 2019 – 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 global economic confidence dipped in Q2 2019, with confidence in the United States dropping to the lowest level in eight years.

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 and at

“Together global confidence and orders suggest weakening global growth in the second half of the year. But fears of a severe global economic collapse or recession are unfounded in current circumstances,” the report notes.

The report found that confidence in the U.S. fell sharply in Q2 2019, to its lowest level in eight years. U.S. economic confidence was hit by the resurgence of trade tensions as tariffs were increased to 25 percent on a range of Chinese imports and – for a while – threatened on Mexico. Additionally, orders fell too and are at the lowest level since late 2016.

“The message continues to be one of slowing Gross Domestic Product growth this year, with recession highly unlikely either this year or next. An almost certain reduction in U.S. interest rates in the second half of this year will help sustain growth,” said Warner Johnston, Head of ACCA USA.

Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy said, “This month the U.S. economy will complete ten continuous years of economic growth, the longest such period in over 150 years. This is a remarkable record, even if the pace of growth over this period has not been spectacular. But there are some significant structural changes that will affect the performance of the economy and policy over the longer term.”

The quarterly report features a special section exploring three structural changes: the U.S. jobs market, oil sector and public sector finances.

In terms of the performance of the jobs market, unemployment has fallen to a near-50-year low of 3.7 percent in June. Over the last 10 years, since the economy emerged from the Great Recession of 2008-09, the U.S. has created over 21 million jobs, an increase of 16.5 percent.

But the report notes a structural shift in the relationship between the unemployment rate and wages growth. With the lower unemployment rate, there has come a “modest” revival in wages growth, perhaps due to a greater share of total income accruing to capital rather than labor. Rising inequality may also be a factor in overall wages growth, as wages for the relatively few at the top of the earnings distribution grow much faster than for the vast majority of workers.

The recent boom in U.S. oil production now means that higher oil prices are likely to be a net positive for the economy, the report notes. This is in marked contrast to earlier decades when higher oil prices were an unambiguous negative and a primary cause of stagflation, the combination of high inflation with sluggish growth. One positive result is the emergence of the U.S. as a net exporter of oil. The International Energy Association, for instance, forecasts that U.S. exports of crude oil will almost double to 9 million barrels a day by 2024, surpassing Russian exports and approaching Saudi levels.

The third structural change in the U.S. is the fiscal position measured by the public sector deficit and debt. In 2018, the U.S. economy grew by almost 3 percent, while the public sector deficit increased by over 2 percent to 6.6 percent of GDP. This boosted the deficit and level of public sector debt in the U.S. – such increases are likely to be more permanent than similar ones incurred during an economic downturn.

“The U.S. economy remains the largest and in many respects the most successful in the world,” Lawson said. “But there are structural changes that represent challenges for policymakers. Perhaps the greatest concern arises from the level of public sector debt which is on track to reach its highest level since 1946. More positively, the U.S. can operate at lower levels of unemployment without generating upward pressure on inflation. Finally, the resurgence of the oil industry and the emergence of the U.S. as a net exporter of oil is a positive for the economy. But this requires an adjustment in policy responses and may introduce greater volatility to the economic cycle.”

In other Q2 2019 findings:
  • Growth in the U.S. in the first quarter was surprisingly strong at an annualized rate of 3.2 percent, faster than in Q4 last year. Despite this, the outlook is for slower growth this year at 2 percent to 2.5 percent compared with last year’s 2.9 percent.
  • Orders fell slightly in the second quarter and are now consistent with U.S. growth slowing to an annual rate of around 1.5 percent in the second half of the year.
  • Global growth is slowing as 2019 progresses but that slowdown is not yet precipitous or indicative of imminent global recession. The major downside risk continues to center on trade tensions and their potential to have much wider effects beyond the U.S. and China. In recent months, there has been a shift in the stance of major central banks, notably the U.S. Federal Reserve.
Fieldwork for the Q2 2019 GECS took place between May 31 and June 13 and attracted 1,161 responses from ACCA and IMA members around the world, including more than 100 CFOs.

About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering 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.

ACCA supports its 219,000 members and 527,000 students (including affiliates) in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 110 offices and centres and 7,571 Approved Employers worldwide, and 328 approved learning providers who provide high standards of learning and development.

Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here:

About IMA® (Institute of Management Accountants)
IMA®, named the 2017 and 2018 Professional Body of the Year by The Accountant/International Accounting Bulletin, 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) and CSCA® (Certified in Strategy and Competitive Analysis) programs, continuing education, networking and advocacy of the highest ethical business practices. IMA has a global network of more than 125,000 members in 150 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/India. For more information about IMA, please visit