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Economic slowdown poised to continue to dominate international business landscape

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Economic slowdown poised to continue to dominate international business landscape

US remains relatively stable.

Falling income is the biggest concern for global businesses, according to the latest and largest regular global survey of finance professionals. Nearly half of businesses (46%) reported a decline in earnings in the fourth quarter of 2015, according to a survey conducted by the Association of Chartered Certified Accountants and the Institute of Management Accountants.

The survey of more than 2,500 finance professionals and more than 200 CFOs around the world also shows that business confidence has hit rock bottom, where 44% of respondents were less confident than three months earlier.

Businesses not only reported a fall in income, but also more difficulty in accessing finance, with half of them cutting their workforce or putting a recruitment freeze in place, and 40% saying they had cut back investment plans since the third quarter of 2015.

"Despite this overall good news, there is a clear divergence within the US economy."

The United States economy continues to perform relatively well, even if business confidence was undermined last quarter by the strength of the US dollar and the prospect of a rate hike. Data showed the US economy grew by a relatively healthy 2.1% in Q3, retail sales continued to expand in October and November, and auto sales hit a record high for the year. Moreover, concerns that the labor market was losing momentum were eased by strong employment gains. In October to December, non-farm payrolls increased by an average of 284,000 a month, up from an average of 174,000 in the third quarter.

"Despite this overall good news, there is a clear divergence within the US economy," said Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy. "While domestic-oriented sectors have benefited from the strong labor market and U.S. dollar, the manufacturing and energy sectors continue to perform poorly, in part due to oil prices."

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