• Africa sees modest increase in economic confidence
• Political uncertainty holds up domestic reform
• Investment trends may be on the up
Global economic confidence remains low in Q1 2019, despite rising for the first time in a year, finds the latest Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants).

The global poll of 1,355 accountants shows that all key regions reported a bounce in confidence with Asia Pacific and the Middle East seeing the biggest gains, while confidence in Africa registered a modest increase in the quarter and orders declined. While the Q1 2019 saw the continent’s confidence index virtually unchanged, oil prices boosted resource exporters and the pause in US monetary tightening eased pressure on capital outflows and currency depreciation.

Jamil Ampomah, director of ACCA Africa comments: ‘Political uncertainty is an issue in many African countries where much-needed domestic reform is being held up.

‘Looking ahead, we think investment in some of the large African economies should pick up this year and the GECS measure of investment opportunities is on a strong upward trend with a big jump in Q1 2019.

‘However, there are significant downside risks, notably the economic slowdown in China and the euro-zone – the major destinations for African exports. Growth in the region this year is likely to be around 3½%, an improvement on recent years but still below the rate that will significantly lift per capita incomes.’

Global results
For Q1 2019, the global orders index was virtually unchanged in the latest GECS. This index held up better than confidence in recent quarters and underscores the message that GECS is pointing to slower global growth this year but not a major collapse.

The GECS also revealed easing concerns about inflation with 48% of respondents expressing concern about rising costs, down from 52% in Q4 2018.
GECS Q1 also shows:
• Just 22% of global respondents said they had problems accessing finance suggesting fairly easy financial conditions.
• 45% of respondents globally are considering laying off staff, 17% considering taking on new workers;
• 36% of respondents are considering scaling back investment in new capital projects, compared with just 16% who are looking to increase investment in new projects;
• the possibility of suppliers going out of business being a concern for just 12% of respondents – unchanged from Q4 2018.

Michael Taylor, chief economist at ACCA said of the global results: ‘Whilst the confidence index increased in Q1 2019 compared with Q4 2018, it remains at a fairly low level and consistent with a slowdown in growth. It should be recalled that confidence and activity indicators are all significantly lower than a year ago. But the orders index is little changed in Q1 compared with Q4 last year and suggests that the slowdown in growth will not be too severe this year.

‘Even before the increasing evidence of a growth slowdown emerged the inflation picture was generally benign. It has become even more so recently as demand has slowed.’

Taylor continued: ‘GECS shows a fall in concern about rising operating costs. This is the third quarterly fall in a row and reduces cost concerns to the lowest since Q1 2018.’