Finance directors have lost faith in the economy over the past year, as accounting scandals, terrorist attacks, the continuing downturn and fears of war dampened business confidence.
More than half of FDs responding to the Accountancy Age/Reed Accounting personnel Big Question admitted they had less confidence in the economy than 12 months ago.
UK plc has taken a beating this year. The US accounting scandals are among the problems cited by FDs. But the country had already been experiencing difficulties as a result of the foot-and-mouth outbreak, the drop in the manufacturing sector and the effects of September 11.
Of the 53% who lack confidence in the economy, one said: ‘Accounting scandals increased receiverships and the increase in sectors having a tough time point towards worse to come.’
And with the possibility of a war with Iraq, confidence has sunk to a new low. Some were particularly concerned with the effects of a looming war. ‘The unrest in the Middle East could have serious consequences for our economy, especially if the US decides to attack Iraq without the support of the rest of the world,’ said one.
But 24% said they were more confident, saying there was now a ‘more realistic assessment of earnings and the marketplace as a whole.’
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