NEARLY three quarters of businesses are wrestling with increased costs — the highest proportion of respondents reporting increased cost pressures for the last decade — and over one in three are worried about decreased income, according to the latest edition of the Global Economic Conditions Survey (GECS) from ACCA and IMA (Institute of Management Accountants), with a similar proportion highlighting foreign exchange volatility as uncertainty and glimpses of recession dominate the latest economic outlook.

Two developments further underlined the precarious nature of the commercial environment. First, there is an increase in the number of respondents reporting “problems securing prompt payment”, which has risen to the highest level in four years. This could be the first sign of an increase in the number of organisations that may be experiencing cash flow difficulties. At the same time, there has been a noticeable rise in the numbers reporting “problems accessing finance”, with the most aggressive tightening of monetary policy in 40 years likely to hit corporate liquidity.

The data also show confidence on the economic outlook remaining well below the median reading over the past decade while the other three indicators that are more closely related to economic activity — new orders, capital expenditure, and employment — all showed a further deterioration. Taken as a whole, the series are consistent with slower global growth for the remainder of the year, coupled with inflationary pressures rising.

Jamie Lyon, head of skills, sectors and technology at ACCA, said: “Our latest Global Economic Conditions Survey points to obvious ongoing challenges in the global economy, a reflection of the continued economic fallout from the Russian invasion in Ukraine, a further tightening of monetary policy in key jurisdictions, and a cost-of-living crisis. One of the key risks will be how much and how quickly central banks will seek to further tighten monetary policy in the months ahead to tame inflationary pressures, and whether or not the global economy could slow more than business leaders expect in 2023.”

Loreal Jiles, vice-president of research and thought leadership at IMA, added: “For most regions in the world, the GECS survey points to a decline in business orders, both in comparison to the previous quarter and looking across the new orders index over the past year. Coupled with inflationary pressures, it suggests a challenging time for businesses ahead in the next few months.”

Note: The Global Economic Conditions Survey, carried out jointly by ACCA (Association of Chartered Certified Accountants) and IMA, is the largest regular economic survey of accountants around the world in terms of both the number of respondents and the range of economic variables it monitors.

The GECS has been conducted for over 10 years. Its main indices are good lead indicators of economic activity and provide a valuable insight into the views of finance professionals on key variables such as investment, employment and costs.

Fieldwork for the 2022 Q3 survey took place between September 2 and 14, 2022 and gathered 905 responses — 584 from ACCA members and 321 from IMA members.

ACCA and IMA would like to thank all members who took the time to respond to the survey. It is their first-hand insights into the fortunes of companies around the world that make GECS a trusted barometer for the global economy.

About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants.

We’re a thriving global community of 241,000 members and 542,000 future members based in 178 countries and regions, who work across a wide range of sectors and industries. We uphold the highest professional and ethical values.

We offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. Our qualifications and learning opportunities develop strategic business leaders, forward-thinking professionals with the financial, business and digital expertise essential for the creation of sustainable organisations and flourishing societies.

Since 1904, being a force for public good has been embedded in our purpose. In December 2020, we made commitments to the UN Sustainable Development Goals which we are measuring and will report on in our annual integrated report.

We believe that accountancy is a cornerstone profession of society and is vital helping economies, organisations and individuals to grow and prosper. It does this by creating robust trusted financial and business management, combating corruption, ensuring organisations are managed ethically, driving sustainability, and providing rewarding career opportunities.

And through our cutting-edge research, we lead the profession by answering today’s questions and preparing for the future. We’re a not-for-profit organisation. Find out more at accaglobal.com

About IMA® (Institute of Management Accountants)

IMA® is one of the largest and most respected associations focused exclusively on advancing the management accounting profession.

Globally, IMA supports the profession through research, the CMA® (Certified Management Accountant) and CSCA® (Certified in Strategy and Competitive Analysis) programs, continuing education, networking, and advocacy of the highest ethical business practices.

Twice named Professional Body of the Year by The Accountant/International Accounting Bulletin, IMA has a global network of about 140,000 members in 150 countries and 350 professional and student chapters. Headquartered in Montvale, N.J., USA, IMA provides localized services through its four global regions: The Americas, Asia/Pacific, Europe and Middle East/India. For more information about IMA, please visit www.imanet.org.