The level of confidence in global economic conditions dropped among accountants in the second quarter of the year, especially in the U.S., according to a new survey conducted by the Association of Chartered Certified Accountants and the Institute of Management Accountants.
The ACCA and IMA Global Economic Conditions Survey found that confidence in the U.S. plunged to its lowest level in eight years, in part due to trade tensions as tariffs increased to 25 percent on a range of Chinese imports and were threatened against Mexico. Orders for goods also fell and are at the lowest level since late 2016.
“The message continues to be one of slowing Gross Domestic Product growth this year, with recession highly unlikely either this year or next,” said ACCA USA CEO Warner Johnston in a statement. “An almost certain reduction in U.S. interest rates in the second half of this year will help sustain growth.”
Also on the positive side for the U.S. economy, unemployment fell to a near 50-year low of 3.7 percent in June, and over the past 10 years, the U.S. has created over 21 million jobs — an increase of 16.5 percent.
“This month the U.S. economy will complete 10 continuous years of economic growth, the longest such period in over 150 years,” stated IMA vice president of research and policy Raef Lawson. “This is a remarkable record, even if the pace of growth over this period has not been spectacular. But there are some significant structural changes that will affect the performance of the economy and policy over the longer term.”
For the fourth quarter in a row, cost pressures eased among the global respondents to the survey, with 45 percent of them citing this as an issue, down from 55 percent a year ago. The possibility that their suppliers could go out of business was a worry for just 9 percent of the respondents, the lowest level in a year. Only 17 percent of the respondents were concerned about customers going out of business, the lowest level in four years. Both employment and investment intentions increased slightly this quarter, but were in line with long-run averages.
In contrast to the U.S., Asia, the Middle East and the U.K., economic confidence was higher in the second quarter among accountants in Africa and Central and Eastern Europe. The report is available
