Global confidence in Q4 of 2020 stalled and remains fragile at the start of 2021, said ACCA and IMA (Institute of Management Accountants) recently when releasing a report based on their jointly conducted Global Economics Conditions Survey.
The global economy contracted by around 4.5% in 2020, the biggest fall in global activity in several decades, according to the report.
Fieldwork for the 2020 Q4 survey took place between November 20 and December 8, 2020, and attracted 3086 responses from ACCA and IMA members, including more than 300 CFOs, said the two organisations.
Having recovered from lockdown-imposed weakness in the first half of the year, many economies again faced weakness as a second wave of COVID infections triggered renewed lockdowns, the report states.
The two organisations envision a steady recovery this year, but continued uncertainty limits the bounce in consumer and business confidence, with pre-crisis output not being reached until mid-2022.
- Global orders, employment and capital investment indices recorded a further modest improvement, but still point to activity well below the pre-crisis level in the fourth quarter of 2019.
- The “fear” indices—concern about customers and suppliers going out of business—edged lower in 2020 Q4 but remain elevated, clearly underlining the extreme uncertainty in the global economic outlook at the start of 2021.
- Inflation concerns remain negligible with concern about costs staying close to an all-time low.
- More than 50% of respondents in Asia Pacific, North America and South Asia expect sustainable recovery in the second half of this year.
- The confidence measure fell back in North America, having surged in the prior third quarter. By contrast, there was a big improvement in Middle East confidence, buoyed probably by continued recovery in oil prices.