The world economy is "on the verge of recovery", having experienced its first decline since the end of the Second World War, according to the International Monetary Fund.
"The advanced economies, hit particularly hard by financial crises and the collapse in world trade, are showing signs of stabilisation, driven mainly by an unprecedented public policy response," the IMF said in its latest World Economic Outlook report.
Read more: http://www.independent.co.uk/news/business/news/recession-is-nearly-over-but-recovery-is-fragile-says-imf-1796339.html
Source: The Independent
Author: Sean O'Grady, Economics Editor
www.ukba.co.uk
Showing posts with label current economic climate. Show all posts
Showing posts with label current economic climate. Show all posts
Friday, 23 October 2009
Wednesday, 30 September 2009
90% of firms confident over survival
Almost 90% of businesses in the UK are confident that their firm will survive the recession, according to research by Clydesdale Bank.
The survey revealed that 89% of business managers are confident their company will survive the recession - with almost a third 100% certain they will make it through.
Despite the downturn the research also showed that less than a third of companies have seen a reduction in business during the recession.
"These figures are promising and show that businesses are beginning to regain confidence. This is a positive sign - where confidence exists growth often follows," said Mike Williams of Clydesdale Bank.
www.ukba.co.uk
The survey revealed that 89% of business managers are confident their company will survive the recession - with almost a third 100% certain they will make it through.
Despite the downturn the research also showed that less than a third of companies have seen a reduction in business during the recession.
"These figures are promising and show that businesses are beginning to regain confidence. This is a positive sign - where confidence exists growth often follows," said Mike Williams of Clydesdale Bank.
www.ukba.co.uk
Saturday, 19 September 2009
Recovery has started but economy still faces huge risks
The British Chambers of Commerce (BCC) has today published its September 2009 Economic Forecast. Despite a further downward revision in GDP expectations for this year, the BCC is more upbeat about economic growth in 2010, and has reduced its forecast for peak unemployment.
The main features of the BCC forecast are:
The UK will see a large GDP decline of 4.3% in 2009, followed by positive growth of 1.1% in 2010 and 1.9% in 2011. In June we predicted a 3.8% GDP fall for 2009 and a small 0.6% increase in 2010.
The current recession - recording peak to trough declines of 5.5% - is much worse than the recession of the early 1990s. However, it is less severe than the early 1980s recession, when GDP recorded cumulative falls of 6.0%.
Further big increases in unemployment are expected, but at a reduced pace. Unemployment is likely to rise from 2.43 million to a peak of just over 3 million, or 9.6% of the workforce, in mid-2010. In June we predicted unemployment would hit 3.2 million.
Public sector borrowing is forecast to total some 12.5% of GDP in 2009-10 and 2010-11. Public sector debt is set to rise to dangerous levels in the next few years, in excess of 80% of GDP.
The BCC believes that the MPC will use the full £175bn allocated to the Quantitative Easing (QE) programme. Another increase in the size of the programme, to at least £200 billion, will probably be needed to ensure that the economy does not falter.
Read more: http://www.britishchambers.org.uk/zones/policy/press-releases_1/recovery-has-started-but-economy-still-faces-huge-risks.html
www.ukba.co.uk
The main features of the BCC forecast are:
The UK will see a large GDP decline of 4.3% in 2009, followed by positive growth of 1.1% in 2010 and 1.9% in 2011. In June we predicted a 3.8% GDP fall for 2009 and a small 0.6% increase in 2010.
The current recession - recording peak to trough declines of 5.5% - is much worse than the recession of the early 1990s. However, it is less severe than the early 1980s recession, when GDP recorded cumulative falls of 6.0%.
Further big increases in unemployment are expected, but at a reduced pace. Unemployment is likely to rise from 2.43 million to a peak of just over 3 million, or 9.6% of the workforce, in mid-2010. In June we predicted unemployment would hit 3.2 million.
Public sector borrowing is forecast to total some 12.5% of GDP in 2009-10 and 2010-11. Public sector debt is set to rise to dangerous levels in the next few years, in excess of 80% of GDP.
The BCC believes that the MPC will use the full £175bn allocated to the Quantitative Easing (QE) programme. Another increase in the size of the programme, to at least £200 billion, will probably be needed to ensure that the economy does not falter.
Read more: http://www.britishchambers.org.uk/zones/policy/press-releases_1/recovery-has-started-but-economy-still-faces-huge-risks.html
www.ukba.co.uk
Monday, 7 September 2009
UK recovery threatened by lack of credit, says EEF
Britain's economic recovery is still being threatened by the lack of credit on offer from banks, a leading manufacturers' organisation reports today, warning that many businesses are actually finding it harder to secure affordable finance than a few months ago.
A survey conducted by the EEF said 47 per cent of firms had seen the cost of finance increase over the past two months, from 44 per cent in the second quarter and 37 per cent in the first. Only 7 per cent of manufacturers said the cost of finance was now falling.
Manufacturers also found the cost of new borrowing was still rising, with banks charging both higher fees and more expensive interest rates.
A third of companies added that the supply of credit had shrunk in recent weeks, though this was an improvement from the second quarter when 42 per cent of businesses warned lines of credit were dwindling. However, small firms, in particular, are being hit by the credit shortage, the EEF said.
Steve Radley, the EEF's director of policy, said that despite action from policymakers, the manufacturing sector's hopes of recovery were being hampered by their credit difficulties. "Despite historically low levels of interest rates and significant intervention by the Government and the Bank of England, credit conditions remain very tight for most manufacturers," he said.
"Given the severe damage done to banks' balance sheets by the recession, this is likely to remain the case for some time and will dampen the recovery as meeting new orders puts increasing pressure on manufacturers' cashflow."
The EEF's warning reflects increasing concern that the inability of banks to lend more to business might prevent the UK from exiting recession or, at the very least, act as a cap on the strength of the recovery.
Source: David Prosser, Business Editor, The Independent
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A survey conducted by the EEF said 47 per cent of firms had seen the cost of finance increase over the past two months, from 44 per cent in the second quarter and 37 per cent in the first. Only 7 per cent of manufacturers said the cost of finance was now falling.
Manufacturers also found the cost of new borrowing was still rising, with banks charging both higher fees and more expensive interest rates.
A third of companies added that the supply of credit had shrunk in recent weeks, though this was an improvement from the second quarter when 42 per cent of businesses warned lines of credit were dwindling. However, small firms, in particular, are being hit by the credit shortage, the EEF said.
Steve Radley, the EEF's director of policy, said that despite action from policymakers, the manufacturing sector's hopes of recovery were being hampered by their credit difficulties. "Despite historically low levels of interest rates and significant intervention by the Government and the Bank of England, credit conditions remain very tight for most manufacturers," he said.
"Given the severe damage done to banks' balance sheets by the recession, this is likely to remain the case for some time and will dampen the recovery as meeting new orders puts increasing pressure on manufacturers' cashflow."
The EEF's warning reflects increasing concern that the inability of banks to lend more to business might prevent the UK from exiting recession or, at the very least, act as a cap on the strength of the recovery.
Source: David Prosser, Business Editor, The Independent
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Tuesday, 1 September 2009
UK businesses confident over future
Over 70% of businesses describe their attitude towards the UK economy as either hopeful or excited, according to new research from Barclays Bank.
The Connecting Business survey found that 57% of respondents characterised their outlook towards the economy as ‘hopeful' and 17% described their attitude as ‘excited.'
15% of respondents believe that their firm will move back into sustained growth in the next six months, with 28% thinking this will occur in six to twelve months.
"Confidence is key to recovery and the results of this survey demonstrate a real and growing confidence in UK businesses," said Ian Stuart, Managing Director of Barclays Commercial Bank.
"The past 18 months have provided an extremely testing environment for many organisations; however, after evolving to meet the challenges of this new commercial landscape we are now seeing the beginnings of a renewed drive for growth."
www.ukba.co.uk
The Connecting Business survey found that 57% of respondents characterised their outlook towards the economy as ‘hopeful' and 17% described their attitude as ‘excited.'
15% of respondents believe that their firm will move back into sustained growth in the next six months, with 28% thinking this will occur in six to twelve months.
"Confidence is key to recovery and the results of this survey demonstrate a real and growing confidence in UK businesses," said Ian Stuart, Managing Director of Barclays Commercial Bank.
"The past 18 months have provided an extremely testing environment for many organisations; however, after evolving to meet the challenges of this new commercial landscape we are now seeing the beginnings of a renewed drive for growth."
www.ukba.co.uk
Wednesday, 5 August 2009
Recession ‘will end within 3 months’
The UK recession will end within three months, according to a report issued by accountants BDO Stoy Hayward.
The accountancy firm believe that the prompt fiscal stimulus package and bank recapitalisation scheme taken in the UK have helped the economy speed ahead in the race towards recovery.
The BDO Output Index - which measures short-run turnover expectations and order book strength - recently saw largest monthly increase in 13 years, rising from 92.3 in June to 95.1 in July.
"The UK seems to be reaping the benefits of a raft of well-timed and calculated moves to stimulate the economy. In stark comparison, sluggishness and indecision has held the Eurozone back from a quicker recovery," said Alex White, Partner at BDO Stoy Hayward.
www.ukba.co.uk
The accountancy firm believe that the prompt fiscal stimulus package and bank recapitalisation scheme taken in the UK have helped the economy speed ahead in the race towards recovery.
The BDO Output Index - which measures short-run turnover expectations and order book strength - recently saw largest monthly increase in 13 years, rising from 92.3 in June to 95.1 in July.
"The UK seems to be reaping the benefits of a raft of well-timed and calculated moves to stimulate the economy. In stark comparison, sluggishness and indecision has held the Eurozone back from a quicker recovery," said Alex White, Partner at BDO Stoy Hayward.
www.ukba.co.uk
Sunday, 26 July 2009
One in three small businesses unaffected by recession
Six months after the Office for National Statistics (ONS) officially announced that the UK is in recession, a new report from Intuit, reveals how small businesses have been performing over the past 12 months.
The results of the research show that one in four small businesses felt no noticeable effect, and 35% had felt a negligible impact from the recession hitting the UK economy.
On the flip-side, one in twenty small businesses have been impacted so severely that their viability is in question.
Recession survival down to initiative and practical actions
Three quarters of small businesses put surviving the recession down to the strength of their own determination and initiative. Only 23% of respondents felt it had been easy to access external help and advice during the recession.
To survive the recession small business owners have used their initiative and adopted some sound business tactics. The most common initiative, used by 45% of respondents, has been to reduce overheads and tightly manage outgoings.
It may be a surprise to learn that the second most popular step, which nearly a third of small business owners took, was to introduce new products or services. This approach flies in the face of the common opinion that businesses should focus on their core operations during a downturn.
www.ukba.co.uk
The results of the research show that one in four small businesses felt no noticeable effect, and 35% had felt a negligible impact from the recession hitting the UK economy.
On the flip-side, one in twenty small businesses have been impacted so severely that their viability is in question.
Recession survival down to initiative and practical actions
Three quarters of small businesses put surviving the recession down to the strength of their own determination and initiative. Only 23% of respondents felt it had been easy to access external help and advice during the recession.
To survive the recession small business owners have used their initiative and adopted some sound business tactics. The most common initiative, used by 45% of respondents, has been to reduce overheads and tightly manage outgoings.
It may be a surprise to learn that the second most popular step, which nearly a third of small business owners took, was to introduce new products or services. This approach flies in the face of the common opinion that businesses should focus on their core operations during a downturn.
www.ukba.co.uk
Friday, 24 July 2009
New research suggests the recession has levelled out for small businesses
Small businesses are now more optimistic about their immediate sales prospects, according to the latest Quarterly Survey of Small Business in Britain by The Open University Business School in association with Barclays Bank and ACCA. While 49% of small firms reported that sales were down over the year, most notably in manufacturing and construction, fewer firms now expect to cut employment, and 62% of small firms have not changed employment levels over this past year.
Almost half of respondents, especially those employing more than five people, now aim to expand over the next three years. Within this group, 34% have seen an increase in sales over the past year showing resistance against the generally poor performance of the economy as a whole.
The biggest improvements are for hotels and restaurants (up from -20% to +27%) and retail (up from -27% to +23%). However while construction does not appear to be suffering as much as in 1991/92, it is the sector with the greatest net cuts as it saw a 30% cut in employment, 20% cut in investment and a 20% drop in selling prices.
Read more: http://www3.open.ac.uk/media/fullstory.aspx?id=16485
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Almost half of respondents, especially those employing more than five people, now aim to expand over the next three years. Within this group, 34% have seen an increase in sales over the past year showing resistance against the generally poor performance of the economy as a whole.
The biggest improvements are for hotels and restaurants (up from -20% to +27%) and retail (up from -27% to +23%). However while construction does not appear to be suffering as much as in 1991/92, it is the sector with the greatest net cuts as it saw a 30% cut in employment, 20% cut in investment and a 20% drop in selling prices.
Read more: http://www3.open.ac.uk/media/fullstory.aspx?id=16485
www.ukba.co.uk
Monday, 20 July 2009
Economic recovery in UK 'on hold'
The UK economy is set to shrink by 4.5% in this year, the biggest fall in a single year since 1945, according to an influential think-tank.
The downbeat forecast is more pessimistic than the consensus view, and considerably worse than the 3.5% fall predicted by the government.
The Ernst & Young Item Club also warned that hopes of economic recovery are "running ahead of reality".
The Item Club also warned of the threat posed to the economy from swine flu.
If doomsday predictions about the extent of the flu outbreak materialise, it forecast a further 3% contraction in GDP this year, on top of the 4.5%.
The flu could also wipe out any growth next year, with a worst case scenario of a further 1.2% contraction.
The Item Club also predicts that UK interest rates will be kept at their current level of 0.5% well into next year.
Read more: http://news.bbc.co.uk/1/hi/business/8157876.stm
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The downbeat forecast is more pessimistic than the consensus view, and considerably worse than the 3.5% fall predicted by the government.
The Ernst & Young Item Club also warned that hopes of economic recovery are "running ahead of reality".
The Item Club also warned of the threat posed to the economy from swine flu.
If doomsday predictions about the extent of the flu outbreak materialise, it forecast a further 3% contraction in GDP this year, on top of the 4.5%.
The flu could also wipe out any growth next year, with a worst case scenario of a further 1.2% contraction.
The Item Club also predicts that UK interest rates will be kept at their current level of 0.5% well into next year.
Read more: http://news.bbc.co.uk/1/hi/business/8157876.stm
www.ukba.co.uk
Tuesday, 7 July 2009
Government predictions are for the UK economy to shrink by 3.5% in 2009 and recover slowly in 2010 registering an increase of 1.25%
The economic destabilisation caused by the credit crunch has had a devastating effect upon the global economy, with particularly severe consequences for export-orientated economies as consumer demand fell due to the limitation of credit, unemployment increased and the financial sector tipped the real economy into recession.
Though the trend of these events could be forecast, the scale has taken many by surprise.
Government predictions are for the UK economy to shrink by 3.5% in 2009 and recover slowly in 2010 registering an increase of 1.25%, before resuming above trend growth in 2011 with a 3.5% increase in activity.
Other forecasters are more cautious. The British Chamber of Commerce predict -3.8% in 2009 and +0.6% in 2010, whilst the CBI suggest growth rates of -3.0% in 2009 and +0.7% in 2010. These estimates
are close to the consensus of a panel of economists, whose predictions are -3.7 and +0.7 accordingly.
Therefore, the broad view seems to be that the economy will begin to recover in Spring 2010 and produce a modest net rate of growth by the end of that year.
Author: Phil Whyman, Professor of Economics at the University of Central Lancashire
Read more: http://www.fpb.org/hottips/440/Mid_year_economic_forecast.htm
Source: Forum for Private Business - www.fpb.org
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Though the trend of these events could be forecast, the scale has taken many by surprise.
Government predictions are for the UK economy to shrink by 3.5% in 2009 and recover slowly in 2010 registering an increase of 1.25%, before resuming above trend growth in 2011 with a 3.5% increase in activity.
Other forecasters are more cautious. The British Chamber of Commerce predict -3.8% in 2009 and +0.6% in 2010, whilst the CBI suggest growth rates of -3.0% in 2009 and +0.7% in 2010. These estimates
are close to the consensus of a panel of economists, whose predictions are -3.7 and +0.7 accordingly.
Therefore, the broad view seems to be that the economy will begin to recover in Spring 2010 and produce a modest net rate of growth by the end of that year.
Author: Phil Whyman, Professor of Economics at the University of Central Lancashire
Read more: http://www.fpb.org/hottips/440/Mid_year_economic_forecast.htm
Source: Forum for Private Business - www.fpb.org
www.ukba.co.uk
Friday, 26 June 2009
The number of new foreign investments in British companies increased by 11% last year, despite the onset of the global economic downturn
Businesses from 53 different countries - the largest variety ever in a single year - invested in UK firms in 2008, maintaining the UK's position as Europe's number one investment destination.
With office rates decreasing, the pound falling against the dollar and a wider talent pool than ever before immediately available due to job losses, foreign companies have seen the recession as a great time to invest in the UK.
"At a time when companies across the world are tightening their belts and focusing their investment in the sectors and countries where it will bring the most benefit, these results are testament to the fundamental strengths of the UK’s economy,” said Business Secretary Lord Mandelson.
Source: UKTI
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With office rates decreasing, the pound falling against the dollar and a wider talent pool than ever before immediately available due to job losses, foreign companies have seen the recession as a great time to invest in the UK.
"At a time when companies across the world are tightening their belts and focusing their investment in the sectors and countries where it will bring the most benefit, these results are testament to the fundamental strengths of the UK’s economy,” said Business Secretary Lord Mandelson.
Source: UKTI
www.ukba.co.uk
Thursday, 25 June 2009
The worst of the recession is behind us and the economy is now stabilising, the CBI has claimed.
However, the business group said the UK will not return to growth until the beginning of next year.
The prediction comes hot on the heels of last week’s claim by the National Institute of Economic and Social Research (NIESR) that the economy actually grew in April and May.
According to CBI predications, GDP will flatten out during the second half of this year, with figures of -0.1% and 0% in the third and fourth quarters of the year.
Richard Lambert, CBI director general said: “The world recession has deepened, so it is not surprising that the UK economy has continued to suffer. However, the harshest period of the recession looks to be behind us, the economy is stabilising and this should continue during the second half of this year.
“The return to growth is likely to be a slow and gradual one; difficult credit conditions are still affecting business behaviour. For positive growth to return, lenders need to feel more confident so that credit can start flowing again.”
Lambert warned against getting ‘carried away’ by indicators of recovery, insisting it would take some time before any green shoots had a real impact.
The group estimates that the UK economy will have shrunk by a total of 4.8% by the end of the recession.
Source: © Crimson Business Ltd. 2009
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The prediction comes hot on the heels of last week’s claim by the National Institute of Economic and Social Research (NIESR) that the economy actually grew in April and May.
According to CBI predications, GDP will flatten out during the second half of this year, with figures of -0.1% and 0% in the third and fourth quarters of the year.
Richard Lambert, CBI director general said: “The world recession has deepened, so it is not surprising that the UK economy has continued to suffer. However, the harshest period of the recession looks to be behind us, the economy is stabilising and this should continue during the second half of this year.
“The return to growth is likely to be a slow and gradual one; difficult credit conditions are still affecting business behaviour. For positive growth to return, lenders need to feel more confident so that credit can start flowing again.”
Lambert warned against getting ‘carried away’ by indicators of recovery, insisting it would take some time before any green shoots had a real impact.
The group estimates that the UK economy will have shrunk by a total of 4.8% by the end of the recession.
Source: © Crimson Business Ltd. 2009
www.ukba.co.uk
Sunday, 21 June 2009
The UK experienced its first growth in industrial output for more than a year in April
The economy grew by 0.1% in May and 0.2% in April after contracting 0.5% in March. The NIESR also reported that the output of the UK economy has fallen by 5% between the beginning of the recession in May 2008 and March this year.
Martin Weale, director of NIESR said that the recession had ended "as far as I can tell." He added, "There has been much less downward momentum than we expected."
Source: official figures released by the National Institute for Economic and Social Research (NIESR).
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Martin Weale, director of NIESR said that the recession had ended "as far as I can tell." He added, "There has been much less downward momentum than we expected."
Source: official figures released by the National Institute for Economic and Social Research (NIESR).
www.ukba.co.uk
Thursday, 18 June 2009
Business confidence in the UK rose for a third consecutive month in May...
...to its highest level in nearly a year, according to the latest Lloyds TSB Business Barometer.
The survey of more than 200 firms found that 44% expect their business activity to increase during the next 12 months, compared with 35% who stated this in April. Only 16% of respondents expect business activity to decrease, down from 21% who thought this in the previous month.
"While it would be premature to talk of an end to the recession, we should be careful not to overlook the significance of the growing confidence we are witnessing amongst businesses," said Trevor Williams, chief economist at Lloyds TSB Corporate Markets.
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The survey of more than 200 firms found that 44% expect their business activity to increase during the next 12 months, compared with 35% who stated this in April. Only 16% of respondents expect business activity to decrease, down from 21% who thought this in the previous month.
"While it would be premature to talk of an end to the recession, we should be careful not to overlook the significance of the growing confidence we are witnessing amongst businesses," said Trevor Williams, chief economist at Lloyds TSB Corporate Markets.
www.ukba.co.uk
Sunday, 7 June 2009
The service sector is still in deep recession, but there are also some signs that sentiment is improving
The latest CBI Service Sector Survey also showed indications that the decline in business activity is starting to slow.
The quarterly research, conducted between 29 April and 13 May, covers 179 service-sector firms. They are divided into Business and Professional Services, such as accountancy, legal and marketing firms, and Consumer Services, including hotels, bars and restaurants, travel and leisure.
In Consumer Services, the volume of business fell over the past three months at the fastest rate since November 2001, but because prices rose, the fall in business values was less marked. In Business and Professional Services, values fell even faster than volumes due to record deflation in average selling prices.
However, in both sectors slower rates of decline in both values and volumes of business are expected in the next three months. If realised, the declines in activity would be the slowest since last summer.
Read more: click here
www.ukba.co.uk
The quarterly research, conducted between 29 April and 13 May, covers 179 service-sector firms. They are divided into Business and Professional Services, such as accountancy, legal and marketing firms, and Consumer Services, including hotels, bars and restaurants, travel and leisure.
In Consumer Services, the volume of business fell over the past three months at the fastest rate since November 2001, but because prices rose, the fall in business values was less marked. In Business and Professional Services, values fell even faster than volumes due to record deflation in average selling prices.
However, in both sectors slower rates of decline in both values and volumes of business are expected in the next three months. If realised, the declines in activity would be the slowest since last summer.
Read more: click here
www.ukba.co.uk
Wednesday, 1 April 2009
A Business Rate Rise on 1st April is Economic Madness
The government has announced that it will allow a record 5% rise in business rates
to go ahead on April 1st causing widespread anger among business groups, who claim that many companies will not be able to afford the rise in such difficult economic times.
The 5% increase in the rate will be the biggest since the current system was set-up in 1993. The increase in the rate is based on Retail Price Inflation figures from last September, when prices were very high.
However, since last September the UK economy has officially entered recession and unemployment now stands at over 2m. There are fears that the increase in the rate will cause some small businesses to cease trading.
"Labour is dragging local firms down the road to ruin. It is the height of economic madness to be increasing taxes on local firms in the depth of recession," said Caroline Spelman, shadow communities spokeswoman.
Source: www.newbusiness.co.uk
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to go ahead on April 1st causing widespread anger among business groups, who claim that many companies will not be able to afford the rise in such difficult economic times.
The 5% increase in the rate will be the biggest since the current system was set-up in 1993. The increase in the rate is based on Retail Price Inflation figures from last September, when prices were very high.
However, since last September the UK economy has officially entered recession and unemployment now stands at over 2m. There are fears that the increase in the rate will cause some small businesses to cease trading.
"Labour is dragging local firms down the road to ruin. It is the height of economic madness to be increasing taxes on local firms in the depth of recession," said Caroline Spelman, shadow communities spokeswoman.
Source: www.newbusiness.co.uk
www.ukba.co.uk
Tuesday, 10 March 2009
UK firms adapt to recession
Short and medium term business confidence has risen simultaneously for the first time in 13 months........
This is according to the latest Business Trends report by accountants and business advisers BDO Stoy Hayward LLP. The modest rise of BDO’s Output and Optimism indices suggests businesses have accepted the realities of the recession and are adapting their plans to manage against the downturn.
Despite this, the labour market picture remains bleak with BDO’s Employment Index dropping from 94.2 in January to 91.7 in February, suggesting a further 320,000 people will be added to the unemployment register over the next three months. However the increases in both the Output and Optimism Index, which predict economic growth, is a tentative sign that the recession has been factored into confidence and business planning and is in stark contrast to the collapse of these indicators since October.
The result also indicates that businesses are taking swift and decisive action to tackle the challenges of the recession, including halting production or implementing new employment strategies to keep costs down. This tactic is further illustrated in the report which reveals that while there has been a reduction in full time employment figures, part time employment actually rose by 33,000 in October – December 2008.
Peter Hemington, Partner at BDO Stoy Hayward, says: “Optimism remains low and businesses expect the economy to continue to contract, but companies are now adapting their business models for an uncertain future. It’s still too early to say if business confidence has hit rock bottom and we’ve already seen a number of false dawns, but this month’s modest increases are encouraging. We must watch carefully to see if this is the start of an upward trend.”
The report’s Optimism Index, which measures business confidence two quarters ahead, rose to 90.5 in February from 89.9 in January. Similarly, the Output Index that measures order book strength and short run turnover expectations in the next quarter edged up to 88.3 in February from 88.1 in January 2009 - a 29 year low.
Source: BDO
This is according to the latest Business Trends report by accountants and business advisers BDO Stoy Hayward LLP. The modest rise of BDO’s Output and Optimism indices suggests businesses have accepted the realities of the recession and are adapting their plans to manage against the downturn.
Despite this, the labour market picture remains bleak with BDO’s Employment Index dropping from 94.2 in January to 91.7 in February, suggesting a further 320,000 people will be added to the unemployment register over the next three months. However the increases in both the Output and Optimism Index, which predict economic growth, is a tentative sign that the recession has been factored into confidence and business planning and is in stark contrast to the collapse of these indicators since October.
The result also indicates that businesses are taking swift and decisive action to tackle the challenges of the recession, including halting production or implementing new employment strategies to keep costs down. This tactic is further illustrated in the report which reveals that while there has been a reduction in full time employment figures, part time employment actually rose by 33,000 in October – December 2008.
Peter Hemington, Partner at BDO Stoy Hayward, says: “Optimism remains low and businesses expect the economy to continue to contract, but companies are now adapting their business models for an uncertain future. It’s still too early to say if business confidence has hit rock bottom and we’ve already seen a number of false dawns, but this month’s modest increases are encouraging. We must watch carefully to see if this is the start of an upward trend.”
The report’s Optimism Index, which measures business confidence two quarters ahead, rose to 90.5 in February from 89.9 in January. Similarly, the Output Index that measures order book strength and short run turnover expectations in the next quarter edged up to 88.3 in February from 88.1 in January 2009 - a 29 year low.
Source: BDO
Saturday, 7 March 2009
Must your business diversify to survive?
As every small business owner will know, the current economic climate is extremely challenging. The UK is in its first recession since the early 1990's, and there is every indication that the situation will remain difficult for at least the rest of the year.
If your business is struggling then you must ask yourself whether you are doing everything possible to survive. What have you done to diversify your business? Are you and your staff putting in longer hours? Have you diversified your business in terms of staff roles, cross-training and what services and products you are offering your customers?
The economic downturn has changed the way that businesses need to operate. This is not the time to carry on operating the same way that your firm was before the recession; you must adapt to the changing conditions.
Read more here: http://www.newbusiness.co.uk/articles/business-continuity/why-you-must-diversify-survive
If your business is struggling then you must ask yourself whether you are doing everything possible to survive. What have you done to diversify your business? Are you and your staff putting in longer hours? Have you diversified your business in terms of staff roles, cross-training and what services and products you are offering your customers?
The economic downturn has changed the way that businesses need to operate. This is not the time to carry on operating the same way that your firm was before the recession; you must adapt to the changing conditions.
Read more here: http://www.newbusiness.co.uk/articles/business-continuity/why-you-must-diversify-survive
Wednesday, 4 March 2009
Recession Insights - Top 10 Critical Business Priorities
1 Provide excellent customer service. We can’t survive without customers, so don’t forget them. Listen and respond to their needs, demonstrate the value you place in them. Review customer and client feedback formally – this will be the litmus test of what you are delivering (and how) and will help to inform positive changes where necessary. Always go the extra mile for your most profitable and loyal customers.
2 Innovate. Develop new unique products and services to distinguish you from the competition. Focus on those that add tangible value or reduce costs for your customers and clients.
3 Invest in people. Offer customer-focused training and reward high performers. The most talented and valuable members of your workforce are those most able to move on during a slowdown. Introduce simple, cost-effective recognition programmes and allow them the flexibility to work where or when they need to.
4 Maintain quality. If you trade on quality, do not cut costs that are visible to the customer in the short term, compromising your reputation in the long term.
5 Reduce debt and manage cashflow. Tighten internal financial procedures immediately and look to secure longer term contracts where possible. The single biggest regret of struggling businesses was that they did this too late, or not at all, which speaks volumes.
6 Respond to the market quickly. Be flexible. Ccapitalise on your size and ability to change direction quickly. Carry out detailed risk assessments on all areas of your business and customer base – identify ‘safe’ areas to focus on.
7 Prioritise marketing. Do not cut budgets or stop advertising as a knee-jerk reaction to challenging trading conditions. The most successful businesses use slowdowns as an opportunity to grow, share and broadcast their message louder than the competition. Crucially, you need to remind your customers that you’re still in business and instil confidence in your existing clients. Slowdowns also offer greater scope for canny businesses to negotiate for favourable deals.
8 Forecasting accurately and plan realistically. Super SMEs tended to have a ‘slowdown plan’ in place. If you haven’t written one, start now. Encourage open and honest communication with your teams on what is realistic. Revisit old order-books to ensure no opportunities are being missed.
9 Know your market. Increase market knowledge and insight. Be seen as the thought-leader in your field and enable your workforce to become experts through sharing information. Use readily available free research online to boost your expertise.
10 Invest in technologies to help your people. The need to work more efficiently has never been higher up the agenda. Invest wisely in IT solutions focused on optimising your workforce productivity, reducing wastage and enabling smarter (not necessarily harder or longer) working.
Extract from: A Guide To Plain Sailing Through The Recession - Plantronic
s - www.plantronics.com.
The full guide can be downloaded here: http://www.sme-guide.co.uk/
www.ukba.co.uk
2 Innovate. Develop new unique products and services to distinguish you from the competition. Focus on those that add tangible value or reduce costs for your customers and clients.
3 Invest in people. Offer customer-focused training and reward high performers. The most talented and valuable members of your workforce are those most able to move on during a slowdown. Introduce simple, cost-effective recognition programmes and allow them the flexibility to work where or when they need to.
4 Maintain quality. If you trade on quality, do not cut costs that are visible to the customer in the short term, compromising your reputation in the long term.
5 Reduce debt and manage cashflow. Tighten internal financial procedures immediately and look to secure longer term contracts where possible. The single biggest regret of struggling businesses was that they did this too late, or not at all, which speaks volumes.
6 Respond to the market quickly. Be flexible. Ccapitalise on your size and ability to change direction quickly. Carry out detailed risk assessments on all areas of your business and customer base – identify ‘safe’ areas to focus on.
7 Prioritise marketing. Do not cut budgets or stop advertising as a knee-jerk reaction to challenging trading conditions. The most successful businesses use slowdowns as an opportunity to grow, share and broadcast their message louder than the competition. Crucially, you need to remind your customers that you’re still in business and instil confidence in your existing clients. Slowdowns also offer greater scope for canny businesses to negotiate for favourable deals.
8 Forecasting accurately and plan realistically. Super SMEs tended to have a ‘slowdown plan’ in place. If you haven’t written one, start now. Encourage open and honest communication with your teams on what is realistic. Revisit old order-books to ensure no opportunities are being missed.
9 Know your market. Increase market knowledge and insight. Be seen as the thought-leader in your field and enable your workforce to become experts through sharing information. Use readily available free research online to boost your expertise.
10 Invest in technologies to help your people. The need to work more efficiently has never been higher up the agenda. Invest wisely in IT solutions focused on optimising your workforce productivity, reducing wastage and enabling smarter (not necessarily harder or longer) working.
Extract from: A Guide To Plain Sailing Through The Recession - Plantronic
s - www.plantronics.com.
The full guide can be downloaded here: http://www.sme-guide.co.uk/
www.ukba.co.uk
Tuesday, 3 March 2009
Recession Insights - Winning Behaviour
It is not just lack of investment in technology that characterises under performance in SMEs. Our research found that SMEs are also more likely to have reduced rather than increased training budgets over the past 12 months (37% have reduced training budgets compared to 24% who have increased them).
in a direct reversal, however, we also identified a new breed of 'Super SMEs’ (those that are actually booming through the slowdown) which are more likely to have increased (rather than decreased) training investment (39% have spent more on their training in the past 12 months while 28% reduced their training spend).
Similarly, while overall SME investment in marketing fell in the past 12 months (36% reduced marketing spend while 32% increased it), amongst our Super SMEs, 43% increased their marketing spend, compared to less than one in five who reduced it. There was also a net decrease overall in IT infrastructure spend. 29% spent less on this, while 27% spent more. Amongst Super SMEs 47% spent more on IT infrastructure and just 16% spent less.
The trends remain the same for employee benefits, flexible working and communication technology and new product development. In each instance the general trend amongst SMEs was to reduce spend. However amongst those SMEs which are currently experiencing growth, or have greater confidence in their long-term future, spend was up across the board.
Extract from: A Guide To Plain Sailing Through The Recession - Plantronic
s - www.plantronics.com.
The full guide can be downloaded here: http://www.sme-guide.co.uk/
www.ukba.co.uk
in a direct reversal, however, we also identified a new breed of 'Super SMEs’ (those that are actually booming through the slowdown) which are more likely to have increased (rather than decreased) training investment (39% have spent more on their training in the past 12 months while 28% reduced their training spend).
Similarly, while overall SME investment in marketing fell in the past 12 months (36% reduced marketing spend while 32% increased it), amongst our Super SMEs, 43% increased their marketing spend, compared to less than one in five who reduced it. There was also a net decrease overall in IT infrastructure spend. 29% spent less on this, while 27% spent more. Amongst Super SMEs 47% spent more on IT infrastructure and just 16% spent less.
The trends remain the same for employee benefits, flexible working and communication technology and new product development. In each instance the general trend amongst SMEs was to reduce spend. However amongst those SMEs which are currently experiencing growth, or have greater confidence in their long-term future, spend was up across the board.
Extract from: A Guide To Plain Sailing Through The Recession - Plantronic
s - www.plantronics.com.
The full guide can be downloaded here: http://www.sme-guide.co.uk/
www.ukba.co.uk
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