Accounting and finance professionals are expressing greater confidence about the world economy this year, according to a new survey.
The quarterly
Accountants in most parts of the world showed greater confidence in the economy. A four-point rise in confidence in North America came after a large gain in the fourth quarter of 2023 and likely reflects growing optimism that the U.S. economy is set for a soft landing this year. The increase in confidence in the Asia Pacific region was the third biggest on record and may reflect growing confidence in the resilience of the U.S. economy, signs of improvement in the Chinese data and wider global economy, and perhaps rising optimism that Japan may finally be exiting from its decades long battle against deflation. The moderate rise in confidence in Western Europe also suggests that growth may be gradually improving from the weakness of recent quarters.
"The continued improvement in confidence in North America, and the rise in the other indicators, likely reflects growing optimism that the U.S. economy is on course for a 'soft landing' or perhaps no landing at all in 2024," said Susie Duong, senior director of research and thought leadership at the IMA, in a statement last week. "That would clearly be welcome news for businesses, although it means we are likely to see less monetary easing by the Federal Reserve this year than investors expected a few months ago."
However, there were some signs of pessimism, with global concerns about increased operating costs on the rise, although they're still below their peak in Q3 2022. Concerns about costs eased in North America and Western Europe, but still elevated by historical standards. In contrast, cost concerns increased in Africa, the Asia Pacific, and South Asia.
"The survey points to some improvement in global growth," said ACCA chief economist Jonathan Ashworth in a statement. "Nevertheless, while encouraging, it is not time to celebrate just yet, with the global economy facing many risks and challenges and still set for below average growth in 2024. Moreover, the elevated level of concerns about costs suggests that the major central banks should proceed very cautiously with any monetary easing."
Accountants are also worried about talent shortages. Survey respondents across all sectors and regions indicated they're feeling the impact of talent retention risks, with many describing the skills shortage as an epidemic. Cybersecurity is also seen as a major threat, particularly with advances in generative AI making ransomware and other cybercrimes easier to do.
