Economy

Economic indicators point to steady trends for Q4

North American and Western European markets show signs of hopefulness amid a challenging financial and job market.
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When the best news from a survey is that the global economy appears to be just narrowly avoiding an outright recession, it’s safe to assume that the overall mood is grim. But, hey, the only place to go from the bottom is up! And up (slightly) a few trends went, according to a recent survey from the Institute of Management Accountants (IMA), which found an improvement in confidence in western Europe and North America.

“We linked some of that to hopefulness, if you will, that [the] Russia-Ukraine conflict will be contained,” Loreal Jiles, IMA’s vice president of research and thought leadership, told CFO Brew, “There’s a lot of emphasis on natural gas, where there is hope that there’ll be sufficient natural gas to see Europe through what looks like it’ll be a milder winter than was initially anticipated.”

Although the economy isn’t quite out of the woods yet—as indicators such as CapEx still remain weaker than a year ago—there have been signs of “steadying,” the survey found. Job creation also dropped to its lowest since Q1 2021, as companies rethink their previous investment plans and hiring intentions.

Jiles told CFO Brew about something she also took note of in the survey: the steep drop in job creation for CFOs as they plan their strategies. “We’ve heard so much over the last three to six months about talent. People are talking about talent retention, talent recruitment. People are trying to find jobs. We see layoffs in droves now as that’s happening in the last 30–60 days across a host of multinational corporations.” Both job creation and investment in staff has dropped since 2021.

Jiles said that despite there being concern that accessing capital would worsen due to monetary tightening, the environment has not worsened.

Could the rise in confidence make for a better-than-expected Q1? There’s hope, the survey seems to suggest. But there are also factors, such as a tough job market, that could keep many in a pinch for a few more quarters.—KT

News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.