Irish accountants ‘the most pessimistic’ on global growth

Irish accountants are the most pessimistic in the world in terms of business confidence, with most observing that global trade is drying up.

More than half report a loss of confidence in the prospects of their organisations over the last three months, with just 12% reporting confidence gains, a new survey reveals.

The Irish members of the global body ACCA (the Association of Chartered Certified Accountants) were the only group in which not a single accountant surveyed said they were “much more confident” than three months earlier. In fact, 87% of Irish respondents felt the global economy was stagnating or deteriorating.

They also exhibited a strongly negative assessment of the Government’s economic policies, with most predicting another five years of austerity programmes.

The latest survey of 3,775 professional accountants, including 176 from Ireland, paints a sobering picture of the global economy.

Finance professionals believe there will be a renewed global economic downturn this year as ACCA’s quarterly survey of accountants shows international trade continued to dry up at the end of last year.

“Almost three quarters of the finance professionals we sampled believe the global economy is either deteriorating or stagnating, with nearly half reporting a loss of confidence in the prospects of their organisations during the last quarter of 2011,” Liz Hughes, head of ACCA Ireland said.

“After three consecutive quarters of weakening demand, the cumulative effect is beginning to take its toll on business, and with banks around the world facing an uphill climb towards capital adequacy, tightening finance is now adding to this challenge,” Ms Hughes said.

“The result is a deteriorating outlook for business cash-flow, which may be driving a rise in business failures. Inflationary pressures, which built up steadily over the past two years, are now easing, but the underlying causes of this trend may be just as worrying as last year’s rise in operating costs,” she said.

The findings also point to weakening trends in employment and investment globally.

“ACCA finds this particularly worrying, because these two indicators are crucial to any kind of sustainable recovery,” Ms Hughes added.

Accountants here have been some of the most pessimistic globally throughout the last three years of Global Economic Conditions surveys and this has remained the case in late 2011.

Respondents continue to expect a sharp fall in government spending over the next five years, which on balance they see as unsustainable, and this is no doubt contributing to a loss of business confidence.