This article was first published in the March 2016 China edition of Accounting and Business magazine.

Falling income is the biggest concern for global businesses, according to the latest largest regular global survey of finance professionals. Nearly half of businesses (46%) reported a decline in earnings in the fourth quarter of 2015 in the final Global Economic Conditions Survey of 2015 carried out by ACCA and IMA (the Institute of Management Accountants).

The survey of more than 2,500 finance professionals and over 200 CFOs around the world also shows that 44% of respondents were less confident than three months earlier, with only 22% saying they were more confident about prospects. 

Businesses not only reported a fall in income but also more difficulty in accessing finance, with half cutting their workforce or putting a recruitment freeze in place and 40% saying they had cut back investment plans since the third quarter of 2015.

Confidence remained especially weak in emerging economies. China’s slowdown is affecting business confidence around the rest of the world and is contributing to serious problems in other major emerging economies, especially those that rely on commodity exports, such as Brazil and Russia. 

Even those oil producers that were relatively well prepared for a drop in energy prices, like Saudi Arabia and the UAE, are now facing weaker growth as governments turn their attention to repairing their finances. Over 60% of respondents in the region reported that they had cut back on investment and employment.

Businesses in OECD economies are more upbeat. Most advanced economies are net importers of energy, and so have benefited from declines in oil prices. The US economy continues to perform relatively well, even if business confidence was undermined last quarter by the strength of the US dollar and the prospect of a rate hike. 

The most significant improvement in business confidence was in the eurozone, where the risk of a near-term break-up of the currency area has faded into the distance after the latest Greek bailout. 

Rising costs were still a problem, with 40% of businesses reporting concerns. While commodity prices have fallen, firms in many parts of the world, particularly Asia and Africa, are still having to deal with rapidly rising wages. 

The survey also shows that despite concerns over global growth, businesses are not expecting much response from governments as spending fell to its lowest-ever level last quarter.

Hong Kong

Business confidence has fallen close to a record low in Hong Kong as a result of the slowdown in economic growth in mainland China. The survey, which attracted responses from 130 finance professionals in Hong Kong, showed that the number of new orders had dropped, while 72% of businesses also reported a drop in profitable opportunities – much worse than the global average. Hong Kong businesses are not, so far, reporting that it has become more difficult to access finance, with only 10% saying that this was becoming an issue.


Even though China’s markets were relatively calm during the final quarter of 2015, business sentiment was still very weak according to the survey, which attracted 79 responses from the mainland. Concerns about the outlook for the economy were undoubtedly a factor behind 71% of firms in China reporting a decline in investment opportunities in Q4 – well above the global average of 48%. The poor start to 2016, which saw the Chinese stock market plunge again and the renminbi sell-off by more than 1.5% against the US dollar within a few weeks, will only have added to nervousness. 


Finance professionals in Malaysia were less pessimistic; 179 respondents said that while growth has slowed, it was nowhere near as dramatic as in commodity-based economies in other regions. However, confidence is not out of the doldrums yet, with 65% of firms becoming less confident over the preceding three months. In addition, the 25% fall in the Malaysian ringgit against the US dollar since mid-2014 will have pushed up the cost of servicing Malaysia’s foreign currency-denominated external debt.


Businesses continued to be pessimistic about their future prospects at the end of last year, with around two thirds (66%) saying that they had become less confident over the preceding three months, compared with 44% globally. The survey attracted the views of 94 finance professionals in Singapore; nearly two-thirds (65%) of firms reported a drop in profitable opportunities in Q4, while 38% said that they were concerned about falling orders, compared with 25% globally.