UAE. Global business confidence dropped marginally in the fourth quarter of 2012, according to a survey of 1,994 finance professionals around the world. 43 per cent of global respondents reported decreased levels of business confidence (up from 41 per cent in Q3), while only 19 per cent reported improved confidence levels.
Meanwhile, 30 per cent of respondents considered that the global economy was on course for recovery (up from 29 per cent in Q3), while 65 per cent (down from 67 per cent) believed it was stagnating or deteriorating.
The Global Economic Conditions Survey, conducted in partnership by ACCA (the Association of Chartered Certified Accountants) and the Institute of Management Accountants (IMA) is the largest regular economic survey of accountants in the world, both in terms of the number of respondents and in terms of the scope of economic variables it monitors.
On balance, respondents in the Emirates reported a modest loss of confidence in their own organisations. While 27% reported confidence gains, down from 35% in the previous quarter, the number of businesses reporting no change in confidence almost doubled to 44%.
This has resulted in the wider Middle East region losing its narrow lead over Africa in terms of business confidence, led by a consistent slowdown in the UAE which has persisted for three quarters now. Perceptions of the global economy also fell into negative territory, with 49% of respondents in the Emirates seeing a weaker or stagnant global economy ahead (up marginally from 48%).
Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research, observed: “The picture in the UAE is one of slightly poorer sentiment, and although going on sentiment alone economic conditions would appear to be stabilising, we’re not so sure. What is encouraging is that capital spending increased in the Middle East, as it did in Western Europe and the Asia-Pacific region, and particularly here in the UAE. This was welcome news following six months of very subdued investment.”
Stuart Dunlop, head of ACCA Middle East said: “It is less encouraging to see input prices have risen substantially, and the labour market is very subdued with businesses reluctant to invest in current or new staff. Respondents are reporting fewer opportunities for working more closely with their suppliers and customers; this does not bode well for the UAE or the wider region.”
Stuart Dunlop concluded: “Until recently, the Middle East was the only major region in which members believed, on balance, that the global economic recovery was still on track. This perception has changed in the last three months, and the Emirates have led this trend. Going into 2013 there are reasons to be optimistic about the global economy; rising employment levels, an end to the slowdown in China, a less volatile situation in Europe and a temporary resolution to the US fiscal cliff crisis are all positives which should impact the global economy in the year ahead. But there’s no denying the fact that the fundamentals in the Emirates are deteriorating and business conditions on the ground are becoming more challenging. Quite what the impact of global developments will be remains to be seen.”
Photo caption: Stuart Dunlop, head of ACCA Middle East.
Global Economic Conditions: Research Methodology
The Global Economic Conditions Survey, carried out jointly by ACCA and IMA is the largest regular economic survey of accountants in the world, both in terms of the number of respondents and in terms of the numbers and scope of economic variables it monitors. Its main indices are good predictors of aggregate GDP in the OECD nation and daily trend deviations correlate well with the VIX ‘fear’ index.
This is the 16th edition of the Global Economic Conditions Survey and the 5th carried out jointly by ACCA and IMA. Fieldwork took place between 29 November and 19 December, attracting 1,994 responses from finance professionals around the world, including 640 senior managers and directors (and, within those, 154 CFOs).
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants with 154,000 members and 432,000 students in 170 countries worldwide. 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 work through a network of over 80 offices and centres and more than 8,400 Approved Employers worldwide, who provide high standards of employee learning and development.
For more information, please visit 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.
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