In early January 2009, UHY clients around the world were invited to participate in an online survey. The purpose of the survey was to assess the general sentiment of businesses around the world given the current economic climate and as the impact of the credit crunch begins to take hold on many economies. Please click here to download full report; a summary of key findings follows below.
Respondents to the UHY Business Outlook survey 2009 come from a mix of business size, sector and location, however 75% are businesses with turnovers of USD 25 million or less, 56% are based in Europe (Continental and East) with 44% from the rest of the world. Business services, manufacturing and finance and insurance are the major sectors represented (30%, 20% and 14% respectively).
Given this respondent profile, it is interesting that the survey findings present a ‘business as usual’ picture for many respondents - the current economic situation is affecting their business predominantly to only a moderate degree, however some issues are expected to adversely affect them in the future.
The following key points summarise the detailed findings:
Confidence levels and business impact
Overall respondents seem able to maintain current operations; however their confidence in their ability to maintain their future plans for the business is reduced. Therefore achieving revenue projections, maintaining current staff levels and funding capital expenditure and acquisitions seems less likely this year.
Over 60% of respondents see two key compensating opportunities for their businesses given the current economic climate: with over 60% regarding weakened competition and more easily available talent in the market place. In order to take advantage of these opportunities respondents are most likely to develop and launch new products or services and/or increase sales, however their plans around acquisition or expansion are less likely.
Outlook for the future
Respondents have split views as to when there will be economic improvement for their countries: 36% are optimistic and expect to see improvement this year, however the majority (48%) do not expect to see improvements until 2010. But 17% are more pessimistic and do not expect improvement until 2011 or beyond.
As seen previously throughout this survey it is the plans for expansion, on this occasion into emerging overseas markets, that are being reconsidered with 31% of respondents rating an expectation to do less this year and only 11% saying they expect to do more.
UHY Chairman, John Wolfgang, comments:
“From the survey results it is evident that many businesses remain upbeat despite the downturn in the global economy. Managers see challenges ahead in terms of financing and cost-cutting. Most companies do not predict an increase in sales, but do not expect a massive contraction in sales either. It is their medium term plans for the future that are being put on hold although many seem poised to take advantage of market opportunities that may arise due to weakened competition or exceptional talent becoming available."