UAE. The latest edition of the Global Economic Conditions Survey conducted by ACCA (the Association of Chartered Certified Accountants) and the Institute of Management Accountants (IMA) suggests that the global economy recovered substantially in early 2012 and regained some of the dynamism it had lost over the last year.
The survey findings, representing the views of about 2,200 professional accountants around the world, were welcomed by the two professional bodies: the share of respondents reporting confidence gains in their own organisations had nearly doubled from 16% in late 2011 to 29%, and while the majority (54%) still believed the global economy was deteriorating or stagnating, that figure was down from 73% in the previous quarter.
Emmanouil Schizas, editor of the ACCA/IMA Global Economic Conditions Survey, said “When the results came in, we were a little sceptical and had to tick off all of the likely objections first. Much of the rise in confidence is being reversed as we speak, as the relief factor subsides, but a lot of it is here to stay.”
Confidence gains were fairly consistent across regions and industries, although the Americas and Western Europe seemed to benefit the most in early 2012, as did manufacturers and distributors, particularly in the high-tech sectors.
The survey reports increasing business dynamism, mostly in the Americas and Asia-Pacific, with businesses securing new orders where previously they would not have and responding with increased investment and hiring.
ACCA and IMA have welcomed this development, noting that investment has been subdued at the global level since the end of the ‘green shoots’ stage of the global recovery which lasted from mid-2009 to mid-2010. Africa is still the most confident of the seven major regions covered by the survey, but it is clearly losing ground.
ACCA and IMA believe that the bounce in investment is focusing on two kinds of opportunities in particular. Customer insights, namely the need to understand and benefit from spending decisions under new constraints, is one; the other is supply chain optimisation through deepening relationships and a stronger focus on quality.
The professional bodies also acknowledge the contribution of governments in their major markets, many of which showed signs of loosening their fiscal policies to boost a flagging recovery. It is not clear how much longer they can afford to do so, as respondents generally continue to believe that many major economies, including both the US and China, are likely to spend unsustainably in the medium term.
On the other hand, finance professionals in Western Europe and other countries experiencing austerity also doubted the sustainability of their own governments’ fiscal policies.
The picture in the Middle East
The Middle East outperformed other regions in early 2012, with 32% of respondents reporting confidence gains, up from 26% in late 2011. However, this is a diverse region and it’s very difficult to draw conclusions in aggregate.
Saudi Arabia and the UAE stand out: business confidence is very high (42% and 38.5% of respondents respectively reported confidence gains); both can rely on strong, sustainable government spending; moreover Saudi Arabia boasts the best performance of any major market in terms of new orders and investment.
Egypt, on the other hand, is a negative outlier, and is still reeling from the last year’s transition despite successfully holding elections in January. This is the only major ACCA/IMA market to report a relative loss of confidence in early 2012. Only 24% of respondents reported a confidence gain, compared to 30% in late 2011.
About IMA® (Institute of Management Accountants):
IMA® , the association for 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 60,000 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 www.imamiddleeast.org.
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 147,000 members and 424,000 students in 170 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 80 offices and centres and more than 8,500 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.