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Global Accountants' Confidence Hits a Record Low

In the first quarter of 2025, confidence among accountancy professionals around the world continued to dwindle, marking a significant decline for the third consecutive quarter. According to the Global Economic Conditions Survey (GECS) conducted by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA), the forecast points to the lowest confidence levels recorded since 2020.

Key Highlights

The survey highlighted a marked fall in confidence, particularly among North American accountants. The data revealed that U.S.-based accountants reported their second-lowest confidence levels since the inception of the GECS in 2011. The overall sentiment among North America-based accountants is at its lowest point, raising alarms about potential economic ramifications.

Conducted between late February and mid-March 2025, the survey coincided with growing tensions in U.S. trade policies, especially surrounding the newly announced import tariffs. The introduction of these tariffs has further exacerbated the already precarious state of the global economy. According to respondents, U.S. trade dynamics are primarily responsible for the plummeting confidence levels, compounded by substantial cuts in government spending.

A Closer Look at Economic Indicators

Despite the downturn, there were some positive indicators noted. The U.S. New Orders Index experienced a slight rise, remaining near average. However, declines in capital expenditures and employment indices suggest that the economic environment is cautious.

Economists, including Jonathan Ashworth, Chief Economist at ACCA, expressed concerns over the possible evolution of a negative economic cycle. Firms may potentially pull back on orders, restrict capital expenditures, and reduce hiring if confidence continues to be depressed.

Remarkable Trends Across Regions

Interestingly, some regions experienced a rise in confidence. The Asia-Pacific and Western Europe sectors reported notable gains, mitigating some of the declines faced previously. However, responses indicated rising cost pressures globally, primarily in Western Europe, with North America seeing significant increases as well.

The report labeled the economy as the highest overall risk in Q1. Yet responses were diverse across sectors. For instance, while economic downturns loomed in the corporate sector, cybersecurity threats and talent shortages intertwined with public and non-profit concerns.

An unprecedented finding in this quarter's survey was the elevation of geopolitical risk to the forefront of concerns, likely driven by evolving trade policies and tariffs. Many respondents from the U.S. lauded the uncertainty surrounding regulatory changes, weighing heavily on their confidence.

Conclusion

As global confidence across the accountancy profession teeters, the implications are manifold. Prolonged periods of low confidence can lead to hesitant corporate behavior that may further affect economic recovery. Both ACCA and IMA are closely monitoring these trends, advocating for robust policy responses to bolster confidence and stimulate growth.

This survey continues to serve as a critical tool for gauging the sentiments of finance professionals globally. The insights gained from the GECS are invaluable in understanding key economic variables, such as investments, employment, and cost structures.

For a complete analysis and findings, visit the ACCA and IMA websites.