Global economic confidence dipped amongst accountancy and finance professionals in Q4 2021, according to the latest result from the Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants’ (IMA) Global Economic Conditions Survey (GECS).

The results found that economic confidence fell by 12 points in Q4 2021 due to the rapid spread of the Omicron Covid-19 variant.

Conducted during November and early December last year, the GECS shows that global orders were little changed in Q4, up just one point, signalling that growth will continue at a steady pace early in 2022.

Other key activity indicators remain relatively little changed with the capital expenditure index up one point and employment index down by six points compared to Q3 results.

GECS’ fear indices, which track concern about suppliers and customers going out of business, were also little changed in Q4 but are above pre-pandemic levels.

ACCA chief economist Michael Taylor said: “Accountants are often the first to sense the impact of economic activity, informed by the work they do on a daily basis sustaining economies and from the feedback from their clients, especially in the small business sector. GECS reveals their concerns about costs increasing again, seeing this measure double over the course of 2021 indicating growing inflationary pressures in many markets around the world.”

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IMA vice president of research and thought leadership Loreal Jiles said: “ We asked our members about the risks they perceived ahead for 2022, and perhaps not surprisingly, the main risk identified was about COVID and new waves of infections with over 70% of respondents saying this was a key risk. Supply shortages came second, the issue already having slowed economic growth in late 2021. Policy tightening, either monetary or fiscal, is of less concern, along with policies to address climate change.”

Confidence fell the most in Western Europe by 28 points, which was the first region to see the rapid spread of Omicron. Confidence increased modestly in two regions – Asia Pacific by five points and North America by 10 points. Only the Middle East recorded a fall in the orders index of six points, with South Asia showing the biggest increase at +8 points.

Commenting on the prospects for 2022, Jiles said: “Loreal Jiles continued: ‘ACCA and IMA believe that 2022 will see further progress towards a more normal economic environment with global GDP growth of around 4%. Features of this return to normalcy include reduced household savings offsetting withdrawal of COVID fiscal support, easing of supply shortages and continued growth in levels of employment. While Omicron may slow economic growth through the effect on consumer spending and worker absenteeism, the impact on global economic activity should be modest and is likely to be relatively short-lived.”