Spring brings green shoots of business optimism for Welsh accountants

Welsh accountants sense that the worse of the economic turmoil may be behind us

After months of economic turmoil, a measure of confidence is returning to the economy says accountancy professional body ACCA (the Association of Chartered Certified Accountants). A poll of accounting professionals found cautious optimism about the economic impact of the UK government’s Spring Budget compared with the Autumn Statement in late 2022.

The survey was completed by ACCA members – including members in Wales – working across all sectors of the economy.

In the poll, conducted in the second half of March and following the Chancellor’s Spring Statement, 36% of respondents felt the measures announced in the UK March budget would have a positive impact on the economy.

However, the gloom was not completely lifted. Nearly four in ten (39%) felt the budget wouldn’t make a difference, while around a quarter (25%) felt the impact would be negative.

But the positive feeling contrasts with feedback after the Autumn Statement in late 2022 which suggested that only 18% of respondents felt optimistic about growth potential.

Nevertheless, optimism appears fragile and does not yet appear to have translated into firmer investment or hiring intentions. For the majority (71%), the budget had no impact on recruitment plans, with only 3% more likely to recruit as a result.

Similarly, measures had limited impact on investment plans for almost two thirds (68%), though 11% were more likely to invest and, positively, nearly half (46%) felt that their, or their clients’ organisations, would make use of changes to capital allowances, including new rules allowing full year expensing.

Commenting on the feedback from members, Lloyd Powell, head of ACCA Wales, said:

“After months of financial turmoil these findings suggest accountants and financial professionals may cautiously feel the worst is behind us. However, this optimism is tentative and would suggest firms are still exceptionally cautious about investment and hiring intentions.

“With trading conditions still exceptionally tough, between high inflation and interest rates and the cost-of-living crisis hitting consumers’ pockets, the UK and Welsh governments need a laser focus on tackling these challenges. It’s clear that individual announcements won’t be enough to restore business confidence – a long-term approach to boosting business investment is needed.”