One of the major challenges facing businesses today is increased costs, according to Global Economic Conditions Survey (GECS) by ACCA and IMA.
While nearly three quarters of business are wrestling with increased costs — the highest proportion of respondents reporting increased cost pressures for the last decade, more than one in three are worried about decreased income, the report indicates.
Survey highlights
- There are two developments that further underlined the precarious nature of the commercial environment and the major challenges facing businesses.
- First, an increase in the number of respondents reporting “problems securing prompt payment,” which has risen to the highest level in four years.
- This could be the first sign of an increase in the number of organisations that may be experiencing cash-flow difficulties.
- At the same time, there has been a noticeable rise in the numbers reporting “problems accessing finance,” with the most aggressive tightening of monetary policy in 40 years likely to hit corporate liquidity.
- The data also shows confidence on the economic outlook remaining well below the median reading over the past decade, while the other three indicators that are more closely related to economic activity – new orders, capital expenditure, and employment – all showed a further deterioration.
- Taken as a whole, the series are consistent with slower global growth for the remainder of the year, coupled with inflationary pressures rising.
- The latest Global Economic Conditions survey points to obvious ongoing challenges in the global economy, a reflection of the continued economic fallout from the Russian invasion in Ukraine, a further tightening of monetary policy in key jurisdictions and a cost of living crisis,” said Jamie Lyon, head of skills, sectors and technology at ACCA.
“One of the key risks will be how much and how quickly central banks will seek to further tighten monetary policy in the months ahead to tame inflationary pressures, and whether or not the global economy could slow more than business leaders expect in 2023,” he noted.
“For most regions in the world, the GECS survey points to a decline in business orders both in comparison to the previous quarter, and looking across the new orders index over the past year,” said Loreal Jiles, vice president of research and thought leadership at IMA. “Coupled with inflationary pressures, it suggests a challenging time for businesses ahead in the next few months.”
