Results from the latest Global Economic Conditions Survey (GECS), from IMA® (Institute of Management Accountants) and ACCA (the Association of Chartered Certified Accountants), revealed the scope and impact of the COVID-19 pandemic: Respondents expect 2020 to be the worst for the global economy since World War II, but North America is more optimistic about an imminent economic recovery than other regions across the globe.

The survey found that global confidence recovered slightly from a record low in Q1 2020, providing some optimism that recovery is on the horizon during the second half of the year. Despite this, many regions across the globe still face challenging economic times.

The Q2 GECS, the largest regular economic survey of accountants around the world, both in terms of the number of respondents and the range of economic variables it monitors, captured the true scale of the global recession caused by the response to the coronavirus pandemic. The full report is available here

The survey notes that activity indicators covering orders, capital spending, and employment are at or close to record lows in most regions. In addition, the global orders balance fell by 15 points, around twice its previous biggest quarterly drop, while other global measures of extreme weakness include plummeting employment indices and the rise in concern about customers and suppliers going out of business.  

Despite the troubling findings, respondents in North America were optimistic about a recovery. The survey found that more than one-third of respondents in North America expect a recovery during the current quarter spanning July to September.

“Confidence in Q2 was a mixed picture, and globally there was a modest bounce from the record low in Q1. This unusual combination of very weak orders but slightly better confidence can be interpreted as expectations of a turning point – an unprecedented collapse in activity in the first half of the year, to be followed by some degree of recovery in the second half,” said Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy.

The new survey introduced special COVID-19-related questions, which generated an overall 50-50 split between those expecting economic recovery in the second half of this year and those not expecting this until 2021.

Said Warner Johnston, Head of ACCA USA, “The mixed picture on confidence contrasts with the universally gloomy readings on activity indicators such as orders and employment. Recovery in confidence from Q1 lows can be interpreted as optimism about economic prospects over the second half of the year. In regions such as North America and Europe, the recovery in confidence was modest but in stark contrast with the large fall in orders in both regions.” 

While overall confidence ticked up slightly from a record low in Q1, hinting at a slightly brighter outlook, the portrait for 2021 depends on the trajectory of the virus.

Said Lawson, “On the assumption of no second wave of the virus that requires renewed lockdown measures, the global economy will recover in the second half of this year and through 2021. But the pace of expansion in 2021 is highly uncertain and will depend on developments in the health crisis, such as treatments or a vaccine as well as on economic factors such as policy, and consumer and business confidence.”

Fieldwork for the Q2 2020 GECS took place between May 29 and June 12, 2020, and attracted responses from 1,070 ACCA and IMA members around the world, including more than 100 CFOs. The COVID-19 questions elicited 805 responses.

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