Business confidence and optimism about the global economy improved in the second quarter of 2013, according to a survey by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA).

Almost half (47%) of the 1,833 ACCA and IMA members surveyed felt the economy was improving or about to do so, an increase from 43% in the first quarter of the year.

The survey found that 26% of respondents reported increased levels of business confidence, a rise of 2% from the previous quarter.

Speaking to The Accountant, ACCA senior economic analyst Emmanouil Schizas said: "People are reassessing their expectations of the recovery and the shape it’s going to have. They now believe that the recovery is a lot stronger than they previously thought and they also now believe that they have more access to investment opportunities and capital".

Reasons for optimism
Schizas singled out the simultaneous monetary stimulus in a number of major economies as a significant cause for optimism as it has increased firms access to growth capital, which is investment capital borrowed by firms to expand their activities.

Monetary stimulus programmes, such as the quantitative easing packages implemented by the US Federal Reserve, have moved to increase liquidity by purchasing government backed securities held by firms.

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The purchase of securities has increased the availability of investment capital, allowing that capital to be injected into the economy.
"So much liquidity has been released in several markets simultaneously it is creating a feedback effect where everyone’s excess energy bounces off each other," Schizas said.

Turning point
The survey responses suggest that the second quarter of 2013 was a turning point for the global economy.

Schizas agreed that the economy has reached a turning point, where expectations about future economic performance have been managed effectively by the central banks and now it is time for the real economy to take over.

"There is going to be a lot more appetite for investment and capacity building in the broader sense that might include hiring people. One of the implications of this trend is that a lot of investment decisions that had previously been put on hold will now be unlocked again," Schizas said.

Benefits for the profession
The potential increase in economic activity could lead to an increase in business opportunities for the accounting community in the future. Schizas said there is more appetite for investment and capacity building "that might include hiring people".

As Shizas explained, one of the implications of this trend is that a lot of investment decisions that had previously been put on hold will now be unlocked again.

"For our members, and generally finance professionals, whether they be in practice or industry, that does mean more work assessing investment options, budgeting and planning for expansion," Schizas concluded.

Related links

Global economic conditions survey report: Q2, 2013

Association of Chartered Certified Accountants

Institute of Management Accountants