Both business confidence and optimism about the global economy rose in Q2 2013, building on the significant gains seen in the first quarter.
Almost half of all respondents - 47% - felt that the state of the economy was improving or about to do so, up from 43% in Q1. This is the highest level of optimism in two years and is supported by a stream of improving economic data and positive news about the global and national economies.
Respondents to the survey reported improved access to growth capital reported in Q2 provides further evidence of economic progress. This was evident across regions and in most major ACCA and IMA markets, with the exception of mainland China and Ireland. While many influences have combined to produce this effect, ACCA and IMA singled out monetary stimulus in a number of major economies as the main cause.
However, fiscal policy is also feeding into, and responding to, changes in business confidence. Respondents increasingly expect that a number of ‘big spenders’, led by China, Russia, and the US, will tighten their fiscal policies over the next five years.
US business confidence rose in the second quarter of 2013, led by a strong rebound in the manufacturing and engineering sectors, and perceptions of the economy also improved.
In the UK, confidence in the economic recovery rose substantially in the second quarter of 2013, with 43% of respondents declaring themselves optimistic about the future, up from 24% in the first quarter. Emmanouil Schizas continued: “This view is supported by the IMF upgrading UK growth forecasts earlier this month and the latest ONS statistics showing that the UK economy grew by 0.6% in the last three months to June. But it also builds on many consecutive quarters of steady improvement that haven’t yet been reflected in GDP figures.”
UK business confidence also grew, with 26% of respondents reporting increased confidence in the prospects of their organisations, up from 20% previously. UK businesses’ access to growth capital has been improving, despite some hiccups, throughout the last eighteen months. This has also led businesses to build more human and physical capital, a trend which only accelerated in the latest quarter.
Despite these positive developments, business opportunities increased only marginally as demand and cash flow conditions tightened both quarter-on-quarter and year-on-year in Q2 2013.