Claims that a world economic recovery is underway are based on fragile evidence and recovery could be a year away, according to a survey by the Association of Chartered Certified Accountants.
The survey of 1,200 finance professionals from 92 countries found that while more of them now believe the downturn has bottomed out, they also believe that a reliable recovery is still unlikely to return before late 2010.
Although business confidence continued to recover in the third quarter of 2009, those who saw improvements in conditions (31 percent) were still outnumbered by those who had lost confidence (33 percent).
An increasing percentage of ACCA members (34 percent) now believe that global economic conditions are either about to improve or already improving, but the emerging consensus, expressed by 44 percent of respondents, appears to be that current conditions mark the bottom of the downturn and will persist for some time.
Our survey shows that business confidence is recovering more slowly in the third quarter than earlier in the year when respondents may have stopped panicking about a recession which had seemed to be out of control, said ACCA chief executive Helen Brand. The evidence is that little has changed in trading or orders to suggest that a reliable recovery will happen before the end of 2010.
Nearly 40 percent of the survey respondents reported that their organizations income is unlikely to change over the next three months, with an equal proportion anticipating further losses of income, while only 22 percent have seen their prospects improve.
The survey also shows that as business incomes continued to decrease in the third quarter of 2009, there has been an increase in late payments as well as supplier and customer bankruptcies.
Investment in staff fell at an accelerated rate in the third quarter, while investment in capital projects, which had previously shown signs of stabilizing, seems to be weakening further.
The global survey highlighted substantial regional variations, with the Asia-Pacific region, Africa and, to some extent, Central and Eastern Europe reporting much higher levels of business confidence and more optimism than their counterparts in Western Europe and the Americas.
The figures also revealed dramatic differences in how finance professionals thought government would react to the situation, with 77 percent of respondents in Africa and 60 percent in the Asia-Pacific region expecting increases in public spending, while 68 percent of Western European respondents expected spending cuts. Western Europe was the only region in which public spending was, on balance, expected to fall over the next five years.
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