Global economic recovery lost momentum in Q3 2021 though overall confidence and orders remained at high levels across regions, said ACCA and the Institute of Management Accountants (IMA) recently when releasing results of the latest Global Economic Conditions Survey.
- While global confidence fell by nine points in Q3, confidence jumped in Asia Pacific (+11) and South Asia (+20), after falls in the previous survey.
- North America saw the largest fall in North America (-41), followed by Western Europe (-24). However, both regions are still at relatively high levels of confidence, as is the case globally.
- The Middle East was the only region to record improved confidence for the six months of Q2 and Q3.
- When it comes to orders—which is a useful benchmark to measure real economic activity—there was a split between advanced regions and emerging markets.
- There were falls in orders affecting North America and Western Europe contrasted with modest improvements in emerging markets.
- However, the wider economic prospects in developed economies remain brighter than in emerging markets, where low vaccination rates continue to drag on global economic recovery.
- Another positive indication from the survey are the two “fear indices”, which measure concern that customers and suppliers may go out of business. Both declined again in Q3 and are now back in line with their long-run average levels after spiking around Q2 2020.
- Concern about operating costs is now at its highest level since the start of 2019 and increased five points globally in Q3. This is driven by higher transport and commodities costs, leading to higher inflation and weaker growth now.
Concerns about extra operating costs for businesses should prove temporary as the price mechanism operates to encourage increased supply and reduced demand,” said Michael Taylor, chief economist at ACCA.
“But for now, the effects are to moderate global growth from a rapid to a steady pace. Nevertheless, growth should be sufficient for more economies to regain their pre-pandemic level of activity by the end of the year,” he predicted.