Business confidence has grown in the United States, according to new research from ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants). However, businesses are not yet in a position to take advantage of better trading conditions and easier access to financing.
The Global Economic Conditions Survey (GECS), the largest quarterly economic survey of accountants in the world, has shown that in the first quarter of 2013, US businesses were only just beginning to recover from the political uncertainty that dominated the second half of 2012. Twenty-three percent of the 2,000 respondents said they were more confident about the prospects for their organizations, while 40 percent reported a loss of confidence in the first quarter of 2013.
Although confidence among US finance professionals saw some gains in line with the global average, the survey revealed the rebound in business and investment opportunities in early 2013 had not yet matched the levels seen in early 2012. Similarly, the survey revealed that pressure on cash flow and new orders has been easing for the last six months, but is still high compared to the spring of 2012.
"Mid-2012 marked a turning point for the US economy as politics cast a long shadow over the business environment, and only now are businesses beginning to recover and look ahead," said Emmanouil Schizas, senior economic analyst at ACCA. "They are still suffering from a political hangover and appear to be waiting to see what happens. However, it is a good sign that US enterprises are considering investment once again. The next quarter will test their ability to turn this newfound resilience into growth."
Raef Lawson, PhD, CMA, CPA, IMA vice president of research, added: "Understandably, US businesses are taking a cautious approach to growth, and that trend is clearly reflected across the world, not just in the US That caution is perhaps best demonstrated by the ongoing low levels of business capacity building, despite more available growth capital. It would appear that a lack of available capital is not the main thing holding back US businesses, but a lack of confidence in the economy might be."
US Regional Differences
The GECS has also revealed differences in the confidence index in finance teams across the US regions.
The quarterly survey has shown that since mid-2012, the Northeast and the South have diverged from the rest of the country in terms of business confidence, performing significantly worse, even taking into account the recent rebound in early 2013. Also, confidence levels in the West and Midwest are converging (i.e., reaching similar levels).
Global Confidence Improving
Overall, the global confidence index showed nearly one quarter (24 percent) of respondents reported they were more confident about the prospects of their organizations than three months earlier, up from 19 percent in late 2012, while 37 percent reported a loss of confidence, down from 43 percent. The highest confidence levels were in the Middle East.
Schizas said: "The global confidence gains recorded in Q1 2013 are much larger than what would be expected given the current economic climate. The survey showed that over two-fifths (43 percent) of respondents in early 2013 believed the global economy was improving or about to do so, up from 30 percent in the previous quarter, while just over half (54 percent) expected deterioration or stagnation, down from 65 percent in late 2012. It seems confidence is fuelled by an expectation of economic improvement, but there is no sign of this being justified. As a result, confidence is likely to be short-lived."
About the Survey
This is the seventeenth edition of the Global Economic Conditions Survey and the sixth carried out jointly by ACCA and IMA. Fieldwork took place between February 28 and March 21, 2013, attracting 1,994 responses from finance professionals globally, including 640 senior managers and directors (and, within those, 154 CFOs). It is the largest global quarterly economic survey of accountants, both in terms of the number of respondents and the scope of economic variables it monitors.
About ACCA (Association of Chartered Certified Accountants)
ACCA is the global body for professional accountants with 154,000 members and 432,000 students in 170 countries worldwide. ACCA aims 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. ACCA works through a network of over 80 offices and centers and more than 8,400 Approved Employers worldwide who provide high standards of employee learning and development. For more information about ACCA, please visit http://www.accaglobal.com
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 65,000 members in 120 countries and 200 local chapter communities. IMA provides localized services through its offices in Montvale, N.J., USA; Zurich, Switzerland; Dubai, UAE; and Beijing, China. For more information about IMA, please visit http://www.imanet.org
Source: Business Wire News Release