The ACCA and IMA^®  (Institute of Management Accountants) Global Economic Conditions Survey (GECS) shows confidence rebounded sharply in North America in Q4 in 2023, after a large fall in Q3. Confidence declined among accountants globally for the third consecutive quarter, consistent with a further moderation in global growth. The survey doesn't suggest that a major downturn is on the cards though.

Highlights and the full report are accessible at https://www.imanet.org/about-ima/gecs.

The survey recorded divergent changes in confidence at regional levels with improvements in South Asia and the Middle East, in addition to North America. In contrast, confidence fell for the third consecutive quarter in Western Europe. It also declined materially in Asia Pacific, perhaps reflecting concerns about the state of China's recovery. Meanwhile, confidence fell sharply in Africa, erasing the gains made earlier in 2023.

Fears among accountants that their customers or suppliers could go out of business don't look alarming by historical standards. But with corporate bankruptcies rising, and monetary policy tightening working with a lag, it would be a surprise if there isn't a rise in concerns in 2024.

Global accountancy professionals ranked economic risks, talent retention, and regulatory change as their top three risks, according to the risks section of the survey. Regulatory change, cybersecurity, and economic risks were listed as the top three risks reported in the survey twelve months ago. Geopolitics has also significantly moved up the ranks of risk priorities. Those in financial services tend to view geopolitical risks through the cybersecurity lens, while in the corporate sector, they perceive the threats more as business-critical risks, such as supply chain disruption.

"Concerns among accountants about increased costs eased slightly again in the latest quarter, but remain elevated by historical standards," said Jonathan Ashworth, Chief Economist at ACCA. "This suggests that the risk is that financial market expectations may be too optimistic on the timing and magnitude of central bank rate cuts in 2024."

Susie Duong, Ph.D., CMA, CPA, CIA, EA, senior director of research and thought leadership at IMA, said: "The very large rise in North America puts confidence in the region close to its long-term average. This perhaps reflects increased confidence that the U.S. Federal Reserve may be able to pull off a soft landing in 2024. However, the employment index fell sharply, together with moderate decline in capital expenditure and new orders, suggesting that companies are cautious about expansion before it becomes obvious how the economy performs."