The global economy is facing a period of volatility and major readjustments, according to a new survey of accountants around the world from the Association of Chartered Certified Accountants and the Institute of Management Accountants.

The ACCA/IMA Global Economic Conditions Survey pointed to trends in the second quarter of 2015, including a rise in oil prices, several expected and unexpected rate cuts by central banks, a rebound in Western consumer sentiment and a stock market crash in China, as reasons why global business confidence is levelling off.

“The slowdown in confidence can be traced to the world’s largest economies,” said Faye Chua, head of business insights at ACCA, in a statement. “Many businesses in the U.S. were affected by severe winter storms, port disruptions and a strong dollar, while those in China faced a cooling economy in the first quarter and over-heating stock markets in the second. Of these factors, China’s shift from investment to consumption-driven growth will have the greatest long-term impact on global trade patterns, hitting the world’s major commodity exporters particularly hard.”

The survey found that firms are cutting staff amid global uncertainty. In the past quarter, 41 percent of the accountants surveyed said their businesses have cut staff or ceased recruitment, nearly twice the number that  have increased staff levels over the same period.

But there was significant regional variation in the relationship between confidence in economic outlook and willingness to take on new staff. In North America, the number of firms creating new jobs was greater than those expressing greater confidence in the economy. However in South Asia and Africa, by contrast, relatively high confidence had yet to translate into new investments in people. This may reflect a degree of uncertainty about the sustainability of business growth in regions that still face numerous internal challenges and external vulnerabilities.

“With more sturdy fundamentals re-emerging in the U.S. and Western Europe, the role of consumers in driving demand is coming back to the forefront,” said IMA vice president of research and policy Raef Lawson. “Overall confidence is set to rise in wake of stronger economic reports from both the U.S. and China, specifically with retailers demonstrating faith in rising consumer spending by hiring an additional 300,000 employees nationwide over the past year.”

In the second quarter, the major global concern was an increase in costs, with 46 percent of respondents worried about the impact. While the Federal Reserve is likely to raise short-term interest rates in the U.S. before the year is over, which could intensify current currency trends, costs are expected to generally remain low in areas such as the price of oil.

In addition, many investors will turn away from commodities, particularly in the wake of speculation that interest rates could soon rise.  

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