Confidence in the economy among finance professionals in North America nosedived in the second quarter of this year, even as their counterparts around the world were feeling slightly more positive overall.
A total of 665 accountants and other finance professionals, including 69 CFOs, participated in the latest quarterly Global Economic Conditions Survey, conducted jointly by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA).
Confidence by region
The survey found that the global confidence index improved by 1.4 points. The figure represents the proportion of participants who grew more confident in their organization’s economic prospects than they were in the preceding calendar quarter, minus the proportion who became less confident.
By comparison to the global result, confidence among North American professionals slumped drastically, by -16.5 index points. That index is now well below its historical average.
“The American economy has slowed from the heady pace of expansion in the second half of 2023, and the latest results raise the risk of some further moderation over coming quarters,” said Alain Mulder, senior director of Europe operations and special projects for IMA.
He added, “The probability that the U.S. Federal Reserve begins easing monetary policy after the summer has increased, although inflation developments over coming months will be crucial.”
CFOs speak up
Meanwhile, isolating the survey responses of the CFO participants globally, the confidence index showed “decent” improvement in the second quarter, as did other economic signals, according to the survey report.
The new CFO Confidence Index of -10.1 was better than both the first-quarter index (-16.2) and the median CFO index (-11.5) since the quarterly survey began in the fourth quarter of 2011.
Three other key CFO indices published by ACCA and IMA track orders, capital expenditures and employment.
- The Orders Index — the proportion of CFOs reporting increased orders minus the proportion reporting declining orders — improved strongly in the second quarter, to -1.4, from -13.2 in the first quarter (against a life-of-survey median of 14.0).
- The Capex Index — the proportion of CFOs reporting increased investment in capital projects minus the proportion reporting decreased investment — was -21.7 in the second quarter, again a big improvement from -39.7 in the first quarter (with a 20.5 median over the life of the survey).
- The Employment Index — the proportion of CFOs reporting “new jobs created/hiring resumed” minus those reporting “staff cuts/hiring freeze” — was -20.3 in the second quarter, equal to the life-of-survey median and slightly better than the -22.1 registered in the first quarter.
“The results from the latest quarter were encouraging,” said ACCA Chief Economist Jonathan Ashworth. “All in all, the key indicators are currently indicative of a broadly decent global economic backdrop.”
