Accountancy experts say UK unemployment is expected to increase sharply, despite economic confidence in Q2 showing small signs of recovery reported in GECS survey 2020

A national survey of senior accountancy practitioners, who reflect the outlook of nearly 1,000 businesses they advise, found that confidence picked up by 5 points to -34 after capitulating in Q1 with the world reeling from the Covid-19 fallout.

Regrettably, the survey highlighted an employment index fall of 21 points to an eight-year low of -54s.

The report Global Economic Conditions Survey (GECS), jointly published by ACCA (Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) reveals:

  • Measures of orders – or incoming business – are weak across all regions of the global economy, reflecting the collapse in activity caused by the crisis.      
  • Global confidence recovered slightly from the record low reached in the Q1 survey
  • Optimism that recovery is in prospect in the second half of the year, notwithstanding the collapse in activity through the first half
  • Recovery will not prevent a sharp rise in unemployment in coming months.

Michael Taylor, chief economist at ACCA, revealed there was relatively little divergence in confidence between regions owing to the global nature of the coronavirus economic shock.  

He said, ‘UK economic sentiment is in line with the rest of Western Europe, recording a bounce in confidence in Q2. This indicates a degree of optimism about future prospects.

‘In response to the Covid-19 pandemic, the government has provided support to households and businesses through its furlough scheme, business interruption and microbusiness loan schemes. But as lockdowns are lifted and the economy begins to recover a fiscal stimulus to boost demand is likely to be needed.’ 

Taylor continued, ‘Another indication of the severity of the present global slowdown is the change in measured concern about customers and suppliers going out of business. Both these series had trended sideways at relatively low levels in recent years but shot up to record highs in Q2 – to 23% for suppliers and 47% for customers.’

Claire Bennison, Head of ACCA UK, said: ‘These results reveal deep-rooted concerns as the government focuses on economic recovery. GECS highlights concerns businesses have over supply chains, new orders and more pressingly, employment.

‘Many businesses await Rishi Sunak’s economic statement this week, and whether there will be an emergency budget or spending review. Businesses owners need to be clear about exactly what they need to do in order to move forward with confidence, save jobs and reboot their business.

‘Uncertainty breeds inaction, this is something businesses simply cannot afford in these difficult times.’

Looking ahead, Michael Taylor concludes: ‘Special COVID-19 related questions in this GECS show an overall 50-50 split between those expecting economic recovery this in the second half of this year and those not expecting this until 2021.

‘There may not be unity on when economic recovery is likely to take place, however a collective effort will be required to ensure a return to economic prosperity as quickly as possible.’

GECS Q2 2020 can be found online at: