Majority of Hong Kong's finance professionals are optimistic about the economy, global survey shows

HONG KONG, May 7, 2014 /PRNewswire/ -- The majority of finance professionals in Hong Kong are now optimistic about the domestic economy, new findings from ACCA's (the Association of Chartered Certified Accountants) and the Institute of Management Accountants (IMA) Global Economic Conditions Survey (GECS) have revealed.

In contrast to mainland China where more accountants are gloomy about the state of the recovery, 52% of respondents in Hong Kong are now optimistic about the domestic economy, up from 41% six months earlier. Only 35% are pessimistic, down from 44% in Q3 2013.

This is in line with improving conditions as business opportunities grew for a third consecutive quarter, cash-flow and demand conditions improved very substantially, and opportunities for non-organic growth also proliferated.

As a result, finance professionals' confidence in their own organisations recovered significantly in early 2014, ending a nine-month slump, but remains low by global standards. Only 10% of the Hong Kong sample reported confidence gains in Q1 2014 up from 5% six months earlier.

Emmanouil Schizas, ACCA's Senior Economic Analyst, said: "Despite improving sentiment and improved access to growth capital, the continued financial instability in the wider region, combined with growing expectations of fiscal tightening in the medium-term, meant that business capacity building fell for a second consecutive quarter."

Globally, business confidence is up, but the economic recovery could be seriously flawed, GECS suggests.

The first GECS report for 2014 saw global business confidence nearly crosses over into positive territory for the first time in five years.

Thirty per cent of respondents around the world were now more confident about the prospects of their organisations than they had been three months earlier, a figure unchanged since late 2013. On the other hand, 31% reported a loss of confidence, down from 34% in late 2013.

Additionally, more than half of the global GECS sample (58%, up from 55% in late 2013) were optimistic about the state of their national economies, reporting that recovery was underway or about to begin. The pessimists only made up 38% of the sample, down from 42% in the previous quarter.

However, a closer look revealed a worrying picture for the economic recovery.

Emmanouil Schizas said: "Despite the best business confidence readings since the GECS began in 2009, ACCA and IMA's analysis of the influence of fundamentals on business confidence suggests that the economic recovery is flawed and has now become much more fragile."

"Since early 2013, global business confidence has become increasingly dependent on price and exchange rate stability. This trend is a sign of building financial turbulence, and has accelerated dramatically in early 2014. Financial stability is now a more significant contributor to business confidence than cash-flow and demand. Expectations of government spending and ratings of government policy also became more significant contributors in early 2014, suggesting that the recovery has been hollowed-out in early 2014 and is now over-dependent on policy."

GECS Quarter 1 2014 can be found here:
http://www.accaglobal.com/gb/en/technical-activities/browse-resources/gecsr-update.html

Notes to Editors

1. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
2. We support our 162,000 members and 428,000 students in 173 countries, helping them to develop successful careers in accounting and business, with the skills needed by employers. We work through a network of 91 offices and centres and 8,500 Approved Employers worldwide, who provide high standards of employee learning and development.
3. As the first global accountancy body entering into China, ACCA now has over 23,000 members and 48,000 students, with 8 offices in Beijing, Shanghai, Chengdu, Guangzhou, Shenzhen, Shenyang, Hong Kong SAR, and Macau SAR.
4. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accounting professionals bring value to economies in all stages of development. We aim to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that, through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and their delivery to meet the diverse needs of trainee professionals and their employers.
5. For more information, please visit:
   www.accaglobal.com | www.facebook.com/ACCA.HongKong