Economic confidence in the U.S. rebounded strongly in the fourth quarter of last year, according to a new survey by the Association of Chartered Certified Accountants and the Institute of Management Accountants.
The quarterly Global Economic Conditions Survey by the ACCA and the IMA found 31 percent of the CFOs, accountants and finance professionals surveyed in North America are more confident about the future, as opposed to 26 percent who are less confident.
The outlook for the U.S. economy is even more confident, with 33 percent of U.S. respondents saying they felt more confident about the future, and just 25 percent feeling less confident. Overall confidence levels reached the levels seen at the beginning of last year, reflecting hope that the recent tax law will boost the economy.
“Confidence in the United States has rebounded strongly, and is now at its highest level since the start of 2017,” said IMA vice president of research and policy Raef Lawsonin a statement. “With growth expected to hit 3 percent this year, and recent tax changes raising hopes of further fiscal boost, over a third of respondents expect to see improving conditions. Yet 25 percent feel less confident than in the previous quarter. In particular there are concerns, with near full employment, the recent corporation tax cut could lead to inflation rather than growth.”
“For the U.S., high levels of consumer confidence, a booming stock market and the recent massive tax cut could lead to strong growth,” Lawson added. “Although its interest rates are likely to rise, the pace of tightening will be gradual and it is unlikely to derail the recovery.”
Globally the picture was more guarded. The number of respondents who expect conditions to worsen now exceeds those expecting it to improve by 14 percentage points, according to the report. On top of that, the hurricanes in the Caribbean last September and plummeting oil prices in the Middle East have led to sharp drops in regional confidence abroad. But global economic confidence nevertheless remained high at the end of 2017, according to the survey.
“The overall outlook for 2018 is a promising one in terms of global economic growth and confidence,” said ACCA USA head Warner Johnston in a statement. “Some of the signs of a global economic recovery in 2017 look set to continue, with improvements for developed and emerging markets.”
In the United Kingdom, economic confidence in the fourth quarter of 2017 fell to one of the lowest levels of this decade despite raised hopes of a Brexit transition deal, according to the ACCA and IMA global survey of accountants. However, the U.K. findings were at odds with a more positive global picture. Economic confidence remained relatively high at the end of 2017 despite a slight dip from the previous quarter, with an improved economic outlook in the U.S. and South Asia offsetting a more cautious mood in China.
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