Source: ACCA (the Association of Chartered Certified Accountants) or prnewswire.com
– Signs that Recent US Tax Cut is Leading to Increase in Investment, Consumption; Fears of Full Blown Trade War Between US and China Impact Economic Recovery –
NEW YORK and MONTVALE, N.J., July 12, 2018 /PRNewswire/ — The latest Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) released today found that the global economic recovery that started in late 2016 is starting to lose momentum, though North America remained the most confident region in the world.
GECS is the largest regular economic survey of accountants around the world, in terms of both the number of respondents and the range of economic variables it monitors. You can read the full report here or at https://www.imanet.org/insights-and-trends/global-economic-conditions-survey?ssopc=1.
“Confidence in the United States was flat in the second quarter of the year, but it remains high by recent standards,” said Warner Johnston, Head of ACCA USA. “This is reflected in the official data, which suggest that the massive tax cut at the start of the year is leading to higher consumption. There are also signs that, with the unemployment rate at its lowest since 2000, a tight labor market is feeding into faster wage growth; this in turn is providing a further boost to consumption.”
North America remained the most confident region in the world in the second quarter, with official data showing that the massive tax cut at the start of the year is leading to higher consumption; Africa was the second most confident region, sharing an optimistic outlook with America. Both regions are where the number of people expecting conditions to improve exceeded those who expected conditions to worsen.
Globally, the slight fall in economic confidence reflects increasing fears of a trade war between the United States and China, which continues to effect global outlook, with China’s economic sentiment falling sharply, the GECS notes.
Raef Lawson, Ph.D., CMA, CSCA, CPA, IMA vice president of research and policy, said, “Our Q2 analysis mirrors other data that the global economic recovery has slowed since the start of the year. However, confidence is still high by past standards, and a sharp slowdown in economic growth is unlikely in the months ahead. The differences between regions and countries shows marked differences, with concerns about the China-U.S. trade war intensifying – these are uncertain times, and Q3’s results will be heavily impacted by the decisions made in the White House about tariffs.”
In the U.S., confidence was broadly unchanged in Q2 and is high by past standards, with the proportion of respondents feeling more confident about the future exceeding – by nine percentage points – those who feel less confident. That confidence is consistent with the latest hard data, which show that after a difficult Q1 the economy rebounded strongly.
In terms of the GECS sub-components, the biggest change was in government spending, which fell sharply. During the 2016 election campaign, Donald Trump promised to push for a big increase in infrastructure spending, but nothing has been achieved yet, the survey notes. In contrast, there were modest increases in the capital spending and employment sub-components – both of which are at relatively high levels.
Looking ahead, ACCA and IMA’s research shows that the outlook for the global economy remains positive, despite signs that economic growth in some key parts of the world’s economy have slowed since growth reached a peak in the second half of 2017. The report concludes that while the global economy is likely to remain pretty strong over the next year, a modest slowdown looks likely.
Fieldwork for the Q2 2018 GECS took place between June 1 and 14, 2018, and attracted 1,002 responses from ACCA and IMA members around the world, including more than 80 CFOs.
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering 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 supports its 200,000 members and 486,000 students in 180 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 101 offices and centers and more than 7,200 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
ACCA is currently introducing major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com
About IMA® (Institute of Management Accountants)
IMA®, named 2017 Professional Body of the Year by The Accountant/International Accounting Bulletin, 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 100,000 members in 140 countries and 300 professional and student chapters Headquartered in Montvale, N.J., USA, IMA provides localized services through its four global regions: The Americas, Asia/Pacific, Europe, and Middle East/India. For more information about IMA, please visit www.imanet.org.
SOURCE ACCA (the Association of Chartered Certified Accountants)