Confidence among global accountants declined again in early 2025 – although the fall was much less marked than in Q4 2024 – but it still is at its lowest since Q2 2020, according to a recent survey.

Confidence in Q1 2025 fell markedly in North America amid a huge fall in the US, finds the Q1 2025 Global Economic Conditions Survey conducted by the Association of Chartered Certified Accountants ( ACCA ) and the Institute of Management Accountants ( IMA ) between late February and mid-March, and completed in the build-up to last week’s major announcement by the US on import tariffs, which significantly increased the downside risks to the global economy.

The level of confidence among US-based accountants is at its second lowest ever, with commentary from survey respondents suggesting that US trade policy has been the key factor weighing on sentiment, as well as cuts in government spending.

Expectations for increases in US government spending, the study notes, have fallen sharply in recent quarters. Moreover, US Capital Expenditure and Employment Indices both declined and have been at very low levels historically. More encouragingly, the US New Orders Index rose again and is not too far below its average.

Asia-Pacific stronger

Confidence rose quite strongly in Asia-Pacific in Q1, the study points out, after a massive decline over the past couple of quarters. It is now only modestly below its historical average.

There was also a solid gain in the New Orders Index, which is at a very high level by historical standards, potentially boding well for activity over the coming quarters.

However, the Capital Expenditure and Employment indices provide a contrasting picture. The former fell meaningfully and is significantly below average, while the latter rose strongly and is slightly higher than its historical average.

There was a very notable rise in confidence among mainland China-based accountants, and there has been a large improvement in the New Orders Index since Q3 2024.

All in all, the key indicators pointed to some improvement in the economic backdrop in Asia-Pacific, with signs of improvement in the Chinese economy likely an important contributing factor.

That said, the front-loading of exports before US tariff increases may have played a part, and the significant escalation of trade tensions is a major downside risk over the coming quarters.

Risks

Confidence also grew in Western Europe, the study notes, after sharp falls in previous quarters, despite the growing risk from US import tariffs. Meanwhile, cost pressures increased globally. They remain very elevated in Western Europe and rose quite materially in North America.

The economy remained the highest overall risk identified by accountants in Q1, but responses varied across sectors. Cybersecurity was the highest for financial services and tied in first with talent scarcity for the public and not-for-profit sector.

The corporate sector ranked economic woes first and geopolitical instability a tight second. Geopolitical risks came in second overall – the first time it was above third – with respondents in the US especially, commenting on the implications of new policy changes and tariffs.

“Global growth has generally proved quite resilient over recent quarters,” says Jonathan Ashworth, the ACCA’s chief economist. “Nonetheless, the longer that confidence remains depressed, the greater the risk that a self-reinforcing negative cycle could potentially develop, with firms pulling back on orders, capital expenditure and hiring.

“Unfortunately, with global trade tensions stepping up markedly since the survey was completed, the downside risks to the global economy have increased significantly.”

Alain Mulder, the IMA’s senior director of Europe operations and global special projects, adds: “New US policies on trade and government spending, and the uncertainty surrounding them, appear to have had a large negative impact on confidence, while declines in the global markets and signs of slowing in the US economy were likely factors too.”