How's that for an old story? Here's the latest news from ACCA.
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 of our Global Economic Conditions Survey shows the 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 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 we've noticed 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 we are concerned 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.
ACCA's wise man Dr Steve Priddy (aka ACCA's director of technical policy and research) says: '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.
'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.
'On balance, ACCA expects at least another year of challenging economic conditions, but concedes that the more pessimistic of its members have a point,' said Steve.
The picture in the UK - Ghost of Christmas Present fails to cheer up UK accountants
Accountants in the UK are, to some extent, sharing in the cautious optimism reflected in the findings of the Q4 Global Economic Conditions Survey, which included the views of 373 members in the UK. Economic sentiment has surged in the last quarter, with 36% of respondents (up from 28% in September) believing that global economic conditions are either already improving or about to.
The consensus, however, expressed by 50% of respondents, remains that the UK is at the bottom of what promises to be a long downturn. While this is a more favourable outlook than that expressed by their colleagues elsewhere in Western Europe, perceptions in the UK are still quite gloomy by global standards.
On balance, accountants here are expecting a recovery in just short of 18 months. However, as in much of the world, the recovery appears to be a moving target – it has only inched closer despite a three-month interval between the last two surveys.
Generally speaking, perceptions on the timing of the recovery have remained largely unchanged in the UK, with 53% expecting a recovery in one year or less. However, a persistent 10% continue to predict that the downturn will last for at least another three years.
Once again, this is a more favourable outlook than we've seen elsewhere in Western Europe, but lags the perceptions of accountants overseas by a substantial margin.
While perceptions are that the outlook is more favourable, business incomes are still falling in the UK, despite some improvement in the last quarter.
Only 17% of respondents are revising their income expectations upwards, while another 40% are doing the opposite. Investment in both staff and capital is still in freefall.
This is despite a strong seasonal effect ahead of the Christmas and New Year holidays, which has positively affected trading conditions. The decline in new orders is slowing rapidly, and the incidence of business failures and late payment has fallen steeply.
Particularly relevant is the sharp improvement in access to finance, with only 39% of respondents reporting difficulties for their organisations or clients, down from 55% in Q3.
Around 20% have seen the availability of finance actually rising in the past three months, a sharper improvement than the Western European average.
The UK government has been given a good deal of credit for these improvements: after remaining flat at around 15% for half a year, the government's approval rating (the share of respondents rating the government's response as good or very good) has risen to 23%.
On aggregate, these trends have contributed to a slight rise in business confidence, which, for the first time since these surveys began, has crossed into positive territory. This is in line with responses elsewhere in Western Europe.
Businesses, however, have yet to translate this new-found confidence into a search for new opportunities: only the appetite for innovation has remained constant in the past three months (mentioned by 16% of respondents). Importantly, however, businesses' emphasis on cost-cutting appears to have peaked earlier in the year – as this recedes, employment and investment among UK businesses should begin to recover.
Accountants in the UK may not think so kindly of the government for long. In the medium term, accountants expect government spending to fall very sharply – a little too sharply, in fact: 44% of respondents believe that spending will fall faster over the next five years than it should, against 31% who believe it will adjust as it should.
Download a copy of the Q4 Global Economic Conditions Survey here.
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 of our Global Economic Conditions Survey shows the 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 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 we've noticed 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 we are concerned 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.
ACCA's wise man Dr Steve Priddy (aka ACCA's director of technical policy and research) says: '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.
'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.
'On balance, ACCA expects at least another year of challenging economic conditions, but concedes that the more pessimistic of its members have a point,' said Steve.
The picture in the UK - Ghost of Christmas Present fails to cheer up UK accountants
Accountants in the UK are, to some extent, sharing in the cautious optimism reflected in the findings of the Q4 Global Economic Conditions Survey, which included the views of 373 members in the UK. Economic sentiment has surged in the last quarter, with 36% of respondents (up from 28% in September) believing that global economic conditions are either already improving or about to.
The consensus, however, expressed by 50% of respondents, remains that the UK is at the bottom of what promises to be a long downturn. While this is a more favourable outlook than that expressed by their colleagues elsewhere in Western Europe, perceptions in the UK are still quite gloomy by global standards.
On balance, accountants here are expecting a recovery in just short of 18 months. However, as in much of the world, the recovery appears to be a moving target – it has only inched closer despite a three-month interval between the last two surveys.
Generally speaking, perceptions on the timing of the recovery have remained largely unchanged in the UK, with 53% expecting a recovery in one year or less. However, a persistent 10% continue to predict that the downturn will last for at least another three years.
Once again, this is a more favourable outlook than we've seen elsewhere in Western Europe, but lags the perceptions of accountants overseas by a substantial margin.
While perceptions are that the outlook is more favourable, business incomes are still falling in the UK, despite some improvement in the last quarter.
Only 17% of respondents are revising their income expectations upwards, while another 40% are doing the opposite. Investment in both staff and capital is still in freefall.
This is despite a strong seasonal effect ahead of the Christmas and New Year holidays, which has positively affected trading conditions. The decline in new orders is slowing rapidly, and the incidence of business failures and late payment has fallen steeply.
Particularly relevant is the sharp improvement in access to finance, with only 39% of respondents reporting difficulties for their organisations or clients, down from 55% in Q3.
Around 20% have seen the availability of finance actually rising in the past three months, a sharper improvement than the Western European average.
The UK government has been given a good deal of credit for these improvements: after remaining flat at around 15% for half a year, the government's approval rating (the share of respondents rating the government's response as good or very good) has risen to 23%.
On aggregate, these trends have contributed to a slight rise in business confidence, which, for the first time since these surveys began, has crossed into positive territory. This is in line with responses elsewhere in Western Europe.
Businesses, however, have yet to translate this new-found confidence into a search for new opportunities: only the appetite for innovation has remained constant in the past three months (mentioned by 16% of respondents). Importantly, however, businesses' emphasis on cost-cutting appears to have peaked earlier in the year – as this recedes, employment and investment among UK businesses should begin to recover.
Accountants in the UK may not think so kindly of the government for long. In the medium term, accountants expect government spending to fall very sharply – a little too sharply, in fact: 44% of respondents believe that spending will fall faster over the next five years than it should, against 31% who believe it will adjust as it should.
Download a copy of the Q4 Global Economic Conditions Survey here.
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