The global economic recovery has run out of steam, reveals the Association of Chartered Certified Accountants latest Global Economic Conditions survey, with confidence taking a hit and a return to solid economic growth moving further away.
This is despite important improvements in conditions on the ground across most of ACCA's risk indicators - especially the outlook for employment and investment - and even modest gains in the popularity of government actions to deal with economic turbulence.
"These are sobering findings from our global network of members. It is good news that fewer businesses are making staff redundant, becoming insolvent or having trouble accessing finance. But none of this translates to more business confidence or optimism. While accountants are breathing a sigh of relief, there is nothing to cheer about," says Helen Brand, chief executive of ACCA.
ACCA's findings suggest that past confidence gains have slowed especially among accountants in Asia-Pacific and Africa, the two regions leading the recovery. These now report fewer profitable opportunities for their organisations as consumption in debt-laden wealthy countries refuses to keep up and governments roll back their support for businesses.
The key findings reveal that 23% of respondents believe that the global economic outlook is improving, up slightly from 21% in the last quarter. Also, 39% say that we are at the bottom of the cycle and will stay there for some time to come.
Respondents who believe that the global economic outlook is improving, or is about to do so, are still outnumbered by those who think it is deteriorating or stagnating. Business confidence levels have also eased. Only a third now report any business gains at all, while 28% report losses of confidence.
Only 29% of respondents adjusted their expectations of their organisations' incomes upwards in the first quarter of 2010, down from 32% in 2009.
Accountants have adjusted their views about the duration of the recovery - only 15% now believe the recovery has less than a year to run, down from 18% in late 2009.
Although one in two respondents predicted that the global economy would return to stable growth in one year or less, down marginally from late 2009, ACCA has also noticed a steady rise in the percentage of extreme pessimists - those expecting a recovery in three years or more - which now stands at 11.4%, up marginally from last quarter.
In the Asia Pacific region, the pace of recovery, while brisk, appears to have levelled off in almost all respects and business confidence has eased significantly. Just under two-thirds (64%) of respondents believe conditions are about to improve or already doing so. Alarmingly, respondents here have been reporting a slowing recovery for many months.
Only 27% expected a return to stable growth in two years or longer in September 2009; 40% did in February 2010. Moreover, members here have reported the first net fall in government support for investment since such measurements began.
These ominous signs could be accompanied by returning inflation. In the region, the share of respondents reporting rising operating costs has risen in every quarter since these surveys began, and jumped from 24% to 36% in the three months to February 2010.