04th
February 2012
Global trade
drying up, says largest ever economic survey
of finance professionals
Finance professionals
believe there will be a renewed global economic
downturn in 2012 as the largest ever quarterly
survey of professional accountants shows that
international trade continued to dry up at the
end of last year.
The latest survey of 3,775 professional accountants,
including 1,414 senior executives, from around
the world, is the result of the collaboration
between two major professional bodies. ACCA
(Association of Chartered Certified Accountants)
is the global body for professional accountants
and has run the Global Economic Conditions Survey
since 2009. It has now joined forces with the
Institute of Management Accountants (IMA), the
world’s largest and most respected US-based
association focused exclusively on the management
accounting profession, to develop an even more
robust and powerful record of the state of the
global economy.
Their views paint a sobering picture of the
global economy, says Brenda Lee Tang, head of
ACCA Caribbean: “Almost three quarters
of the finance professionals we sampled believe
that the global economy is either deteriorating
or stagnating, with nearly half reporting a
loss of confidence in the prospects of their
organisations during the last quarter of 2011.
“Once again, the biggest loss of confidence
came in Hong Kong, Singapore and Cyprus, all
countries heavily exposed to international trade
and cross-border financial activity, which also
reported some of the worst perceptions of the
global economy; this among other things suggests
to us that international trade is in decline.”
said Dr. Raef Lawson, vice president of research
at IMA.
Similarly, the survey found that professionals
in utilities firms, which are often domestically
focused and fairly robust to economic conditions,
reported some of the strongest net confidence
gains. On the other hand, pharmaceuticals and
IT / communications firms were some of the hardest
hit.
At the regional level, Central and Eastern Europe
has performed the worst in terms of business
confidence, and the Asia-Pacific region is losing
confidence at a rate faster than that of Western
Europe. Africa, the Middle East and South Asia
remain the most upbeat regions, in terms of
both business confidence and respondents’
perceptions on the state of the global economy.
While respondents in some regions have said
there are encouraging signs from resilient levels
of new orders, the damage done to global demand
over the last year has been substantial.
“After three consecutive quarters of weakening
demand, the cumulative effect is beginning to
take its toll on business, and with banks around
the world facing an uphill climb towards capital
adequacy tightening finance is now adding to
this challenge. The result is a deteriorating
outlook for business cashflow around the world
which may be driving a rise in business failures.
Inflationary pressures, which built up steadily
over the past two years, are now easing, but
the underlying causes of this trend may be just
as worrying as last year’s rise in operating
costs,” said Lee Tang.
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