Bean Counters Feel Recovery is Going In Reverse
A significant number of those who are crunching numbers and balancing books are underwhelmed by the so-called recovery. As a matter of fact, many of those surveyed in a worldwide study feel that the global economic recovery, which has been slowing down in the past few months, has now gone into reverse.
According to a survey of finance professionals by ACCA (the Association of Chartered Certified Accountants), faith in the recovery is at its lowest level in 18 months, with less than a third of respondents (32 percent) believing that conditions are improving -- or are about to. In the previous quarter nearly a half (47 percent) were optimistic about economic prospects.
Twice the number of accountants as compared with the previous quarter believe that the recovery is slipping away. As a result, business confidence, as recorded by the survey of more than 600 professional accountants from around the world, has now gone into negative territory for the first time since the third quarter of 2009.
Taking a breather or a double-dip recession?
Manos Schizas, Senior Policy Adviser with ACCA, said: "The issue for finance professionals for some time now has been the question of whether the economy, which had been showing signs of recovery, had taken a pause for breath or was about to take a downturn. The findings of this survey suggest that finance professionals think the downturn is now the more likely scenario."
This may be as a response to developments such as the economic crises in some European countries, and the massive political unrest in the Mideast. Finally, as had been feared, confidence levels among public sector accountants are lower than were seen during the depths of the downturn and the loss of confidence in this sector continues to accelerate.
The survey has also shown that accountants see governments as being powerless to prevent a new downturn. Oddly enough, assessments of government policy have remained relatively positive. While 38 percent of respondents rated their governments' responses to current economic conditions as 'poor' or 'very poor', 26 percent rated them as 'good' or 'very good'.
The survey also shows that late-payments are on the increase, as is the number of insolvencies has risen. The outlook for investment has also deteriorated, with businesses putting off decisions until the economic outlook becomes clearer. Only 8 percent of respondents reported a rise in investment of any kind, and the share of respondents reporting a scaling down of investment in staff and capital was 37 percent.
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