Hopes that 2010 will see a rapid recovery in the world economy have been dashed by the findings of one of the largest-ever global surveys of professional accountants.
While the fourth quarter Global Economic Conditions Survey by Association of Chartered Certified Accountants (ACCA) has provided the global accountancy body with its first firm evidence that economic conditions are finally improving, the survey--which attracted more than 1,700 responses from members in 99 countries--also suggests that a full recovery is moving further away by the day.
For the first time since the ACCA survey began, members reported not only a surge in confidence, with nearly half (46%) of respondents believing economic conditions are about to improve or are already doing so, but also signs that demand, access to finance and cash flow are recovering. The survey's findings show that Asia and Africa are now firmly on the road to recovery, with accountants there reporting gains in both confidence and revenues, while the economies of Europe and the Americas are still stabilising.
However, in spite of all this good news, the rate of global recovery is actually slowing down. ACCA members in the Asia Pacific region, which has consistently led the way out of the downturn, have become more pessimistic in the last quarter, as they are beginning to question whether the economies of the West can keep up with the more dynamic economies in which they work.
In the meantime, a growing number of finance professionals across regions are forecasting a very weak recovery, with 11% of respondents now expecting the downturn to last another three years or even longer.
According to the latest ACCA survey, investment is still falling across all regions and sectors, even though evidence of market failure in the financing of investment is becoming less prominent. Additionally, unemployment is still rising and the state of government finances continues to worry many accountants, with a real concern that the public sector will become a drag on the recovery as heavily indebted governments are forced to make cutbacks. Any of these trends could yet turn this into a double-dip, or W-shaped, recovery.
One sign of recovery that ACCA cannot overlook is that the number of redundancies in the finance profession across the world appears to have peaked mid-2009, with the number of job losses now falling. But the organisation has expressed concern about the fact that businesses are still cutting back on training for their finance people, warning that employers could come to regret this false economy when business picks up again.
"Our fourth quarter survey is the first ever to offer concrete evidence of economic recovery. But while there are increasing numbers of finance professionals who are prepared to call the bottom of the recession, there is also an underlying sense of unease and concern about developments in the coming year," says Steve Priddy, ACCA's director of technical policy and research. 'Many of our members are treating the recovery as a mirage - they can see it on the horizon, but it remains there however much progress their organisations or their domestic economies might appear to be making."
Priddy adds that, on balance, ACCA expects at least another year of challenging economic conditions, but concedes that the more pessimistic of its members have a point.