Global economic survey of accountants records falling confidence in Q4 2012

Meanwhile, 30% of respondents considered that the global economy was on course for recovery (up from 29% in Q3), while 65% (down from 67%) believed it was stagnating or deteriorating.

The Global Economic Conditions Survey, conducted in partnership by ACCA (the Association of Chartered Certified Accountants) and the Institute of Management Accountants (IMA) is the largest regular economic survey of accountants in the world, both in terms of the number of respondents and in terms of the scope of economic variables it monitors.

On balance, respondents in the Emirates reported a modest loss of confidence in their own organisations. While 27% reported confidence gains, down from 35% in the previous quarter, the number of businesses reporting no change in confidence almost doubled to 44%. This has resulted in the wider Middle East region losing its narrow lead over Africa in terms of business confidence, led by a consistent slowdown in the UAE which has persisted for three quarters now. Perceptions of the global economy also fell into negative territory, with 49% of respondents in the Emirates seeing a weaker or stagnant global economy ahead (up marginally from 48%).

Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research, observed: "The picture in the UAE is one of slightly poorer sentiment, and although going on sentiment alone economic conditions would appear to be stabilising, we're not so sure. What is encouraging is that capital spending increased in the Middle East, as it did in Western Europe and the Asia-Pacific region, and particularly here in the UAE. This was welcome news following six months of very subdued investment."

Stuart Dunlop, head of ACCA Middle East said: "It is less encouraging to see input prices have risen substantially, and the labour market is very subdued with businesses reluctant to invest in current or new staff. Respondents are reporting fewer opportunities for working more closely with their suppliers and customers; this does not bode well for the UAE or the wider region."

Stuart Dunlop concluded: "Until recently, the Middle East was the only major region in which members believed, on balance, that the global economic recovery was still on track. This perception has changed in the last three months, and the Emirates have led this trend. Going into 2013 there are reasons to be optimistic about the global economy; rising employment levels, an end to the slowdown in China, a less volatile situation in Europe and a temporary resolution to the US fiscal cliff crisis are all positives which should impact the global economy in the year ahead. But there's no denying the fact that the fundamentals in the Emirates are deteriorating and business conditions on the ground are becoming more challenging. Quite what the impact of global developments will be remains to be seen."