The survey of over 4,500 finance professionals and business leaders worldwide, including more than 350 CFOs, has found that while the economic outlook has improved slightly in the US and China over the last quarter, overall global business confidence has fallen, according to research by ACCA and the Institute of Management Accountants (IMA).

Almost half (44%) of respondents expressed concern over falling income due to low levels of government expenditure, with another 43 % reporting worsening business confidence. The research found government investment falling to its lowest level since the start of 2016, with many developed markets still firmly in austerity mode.

Faye Chua, head of business insights at ACCA, said:’Current political uncertainty is clearly having an impact on global business confidence. In the US the Trans-Pacific Partnership is unlikely to be ratified while likely restrictions on trade with key markets including China and Mexico are also major factors here.

‘In Europe, uncertainty over the outcome of elections in the Netherlands, France and Germany – which could lead to major policy shifts for regional trade and the future direction of the Eurozone – all contribute to a gloomy outlook going into 2017.’

The two bright spots in the survey are China, which the research suggests is responding positively to its economic stimulus programme, and the US ahead of Donald Trump’s inauguration.

Raef Lawson, vice president of research and policy at the IMA, said: ‘There is a real sense that US companies are optimistic about their short-term prospects, with confidence rising for a fourth consecutive quarter. This is in part due to growing expectation of infrastructure spending and tax cuts under the new administration, but also reflects on-going improvements in economic health. Unemployment figures have fallen to pre-financial crisis levels.’

However, Chua warns that a strengthening US dollar could have significant impacts for trade-dependent economies such as Taiwan, Hong Kong, Singapore and Vietnam as well as impact on capital investments for emerging markets such as South Africa, Colombia and Turkey.

‘Businesses and economic forecasters feel that 2017 could mark a new age of uncertainty for the global economy. On a positive note, some of the underlying strengths of OECD and non-OECD economies suggest growth can be maintained and even improved over the next few years,' Chua said.