Economic confidence has rebounded in the first quarter of the year, according to a survey of accountants around the world by the Association of Chartered Certified Accountants and the Institute of Management Accountants.

The improvement in the ACCA and IMA Global Economic Conditions Survey is mostly driven by the U.S., where respondents hope a combination of fiscal reform, infrastructure investment and deregulation will boost economic growth. However, the improvement in confidence was widespread in many other parts of the world, especially Western Europe, Asia Pacific, and Central and Eastern Europe.

The first quarter of 2017 saw the fastest rate of growth in global trade since 2015. The survey found the biggest concern for companies over the past three months was increased costs (cited by 46 percent of the poll respondents), in line with rising inflation rates in many parts of the world. The next two largest concerns were decreased incomes (39 percent) and the negative impact of foreign-exchange movements (35 percent).

ACCA and IMA Global Economic Conditions Survey

Nevertheless, there were significant improvements in employment and investment, with 22 percent of the companies polled planning to create more jobs and raise capital expenditure, up from 16 percent and 14 percent, respectively, in the fourth quarter of last year.

“The rise in confidence, combined with strong economic hard data, offers genuinely encouraging signs for the global economy: with an increasingly optimistic mood in the U.S. and a stimulus-led recovery in China driving prospects for world trade,” said Faye Chua, head of business insights at ACCA, in a statement last week. “This strong start to the year has taken place against a backdrop of potential threats facing the world economy at the start of 2017.”

In the U.S., 37 percent of the survey respondents felt more confident about the future, compared with 24 percent who felt less confident. The buoyant level of confidence coincides with the surging stock market at the beginning of the year, although the levels of confidence were more or less flat compared to the fourth quarter.

“The U.S. economy has maintained an elevated level of confidence from Q4 in 2016, with 37 percent of firms feeling more confident, although there was no uplift from the previous quarter,” said IMA executive vice president Raef Lawson in a statement. “An expectation of increased infrastructural spending and tax cuts has contributed to a buoyant business mood, even though they are yet to materialize into policy.”

He sees cause for concern with inflation and currency fluctuations, though. He noted that 43 percent of the U.S. companies polled are troubled by rising costs, and 22 percent by exchange rate movements. “Despite the Fed’s interest rate hikes, borrowing costs in the developing world remain low, and the dollar is likely to continue growing in value,” said Lawson. “That could pose a challenge to U.S. firms’ competitiveness, and the White House’s determination to reduce the trade deficit.”

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Michael Cohn

Michael Cohn

Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.