KARACHI (September 17, 2009) – Claims that the worlds economy is recovering is based on fragile evidence, according to the latest Global Economic Conditions Survey by ACCA (the Association of Chartered Certified Accountants).
It has repeated its warning that world economic leaders should guard against complacency – and not confuse less panic over the crisis with strong evidence that the recession is over everywhere.
ACCAs third quarter survey of 1,200 finance professionals in 92 countries has shown that while more finance professionals now believe the downturn has 'bottomed out' they also believe that a reliable recovery is still unlikely to return before late 2010 – more than a year away. Although business confidence continued to recover in the third quarter of 2009, those who saw improvements in conditions (31%) were still outnumbered by those who had lost confidence (33%).
While increasing percentage of members (34%) now believe that global economic conditions are either about to improve or already improving, the emerging consensus, expressed by 44% of respondents, appears to be that current conditions mark the bottom of the downturn and will persist for some time. Nearly 40% are reporting that their organisations income is unlikely to change over the next 3 months, with an equal number anticipating further losses of income, while only 22% have seen their prospects improve.
The survey also shows that as business incomes continued to decrease in the third quarter of 2009, there was a rise in late payment as well as supplier and customer bankruptcies. Investment in staff fell at an accelerated rate in the third quarter and investment in capital projects, which had previously shown signs of stabilising, seems to be weakening further.
The figures also revealed dramatic differences in how finance professionals thought government would react to the situation, with 77% of respondents in Africa and 60% in the Asia-Pacific region expecting increases in public spending, while 68% of Western European respondents expecting spending cuts. Western Europe was the only region in which public spending was, on balance, expected to fall over the next five years.