The thought struck me reading the latest NCB Services PMI that we are in the grips of an accountant's recession. The NCB study shows more and more service companies experiencing rising input costs and falling output prices: falling profits are the inevitable outcome. I have never before seen so many businesses totally focused on credit control: my own included.
A recent study (by my own company) for the Institute of Certified Public Accountants in Ireland (CPA) confirms the extent to which financial control is centre stage in the current downturn. But it isn't just the accontants in the companies that are focused on cash: so are the banks. Half of the accountants we surveyed reported that a lack of availability of credit from Irish banks was the main pressure facing their clients.
We will have to wait and see whether the rescue of banks in the United States, UK and Ireland (and elsewhere) will have the desired effect of channelling credit to viable business borrowers. The evidence so far is not very encouraging.