The latest ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants) Global Economic Conditions Survey (GECS) suggests that confidence among accountants and finance professionals edged slightly higher in Q2 2024 to just above its historical average. For chief financial officers (CFOs), all the key global indicators rose, with sharp gains evident in the New Orders and Capital Expenditure indices.
In the UK, SMEs reported a strong rise in confidence, consistent with the global outlook.
The proportion of global respondents reporting ‘increased costs’ eased in Q2 but remains elevated by historical standards.
The GECS also asks accountants to rank their top three risk priorities and for the first time in a year, the economy is not the top concern for respondents working in financial services, although, it is close to the highest it has ever been for those in the corporate sector.
The Q2 survey responses also reveal how organisations are increasingly struggling to get a grip on cybersecurity, which was ranked as the third-highest risk priority for all sectors combined.
Commenting on this, ACCA chief economist, Jonathan Ashworth, said: “Confidence rose strongly among UK SMEs for the second consecutive quarter, consistent with an improving economic backdrop in 2024. The Confidence Index is now above its historical average. The Employment Index also rose strongly and is now close to its average. The picture from the other key activity indicators was less positive though, suggesting the recovery may not be on particularly firm ground at present.
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By GlobalData“There was a second consecutive decline in the New Orders Index, and a particularly sharp fall in the Capital Expenditure index. The latter may have been heavily impacted by increased caution among businesses related to the election. Encouragingly, concerns about increased operating costs eased again.
“Looking at our early indicators of corporate stress, the picture was generally quite positive. Concerns about customers going out of business declined quite sharply and are now below their historical average. Concerns about suppliers rose slightly, but don’t look particularly alarming by historical standards. Meanwhile, problems securing prompt payment fell sharply. One area to keep an eye on though is problems accessing finance. The index only rose modestly, but is now at its highest since 2014 (albeit the outturn is not that much higher than some outturns in recent years).”
ACCA UK head of technical and strategic engagement, Glenn Collins, added: “In light of the King’s Speech last week, the government will be pleased to see an improvement in confidence in this quarter’s GECS’ results. However, it was noticeable that investment in capital was subdued. The government has promised to take the brakes off Britain, but our indices indicate that the investment needed to drive growth is still subdued. Businesses need to see the promised stability in order to plan, invest and improve productivity.”
