Confidence among UK accountants rises despite tough trading conditions

Following a historic low of confidence in Q4 2024, Q1 2025 shows an uptick amongst UK accountants, although still well below normal confidence levels

Confidence among UK accountants rose marginally in Q1 2025, after falling to the lowest ever level in Q4 2024, according to the Q1 2025 Global Economic Conditions Survey (GECS). The survey from ACCA (the Association of Chartered Certified Accountants) and IMA^® (Institute of Management Accountants) suggests that confidence amongst British SMEs has materially improved in Q1, but across the board there was a mixed set of results.

There was a second consecutive increase in the New Orders Index, though it remains below its historical average, but not significantly. While the Employment Index registered a decent improvement, the Capital Expenditure Index declined modestly – both are at very low levels historically.

Concerns about suppliers and customers going out of business declined this quarter, however there were significant concerns evident in some key measures. There was a meaningful rise in the proportion of respondents reporting increased operating costs – it is now at its highest since Q1 2023. Problems securing prompt payment and problems accessing finance indices both rose for the second consecutive quarter, which could negatively impact business cashflow and financial viability.

Jonathan Ashworth, chief economist, ACCA, said: “Global growth has generally proved quite resilient over recent quarters. 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.”

Glenn Collins, head of technical and strategic engagement, ACCA UK, added: “With business confidence so low and all the talk of government strategies, now is the time for action. The lack of final published strategies has a negative impact on businesses, who look to those plans to prioritise investment and grow. While the global market flux provides a challenging environment, it also provides opportunities for business to expand into new markets and a lack of positive forward momentum is holding us back.”

Alain Mulder, senior director, Europe Operations & Global Special Projects at IMA, said: “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.”

Read the report here