| | Half of global
businesses expect a
recovery next year,
according to research by
KPMG International. And
taken collectively, over
eight out of 10
respondents predicted
recovery by 2011 – 11%
said recovery would come
in 2009, 51% said 2010
and 22% predicted 2011.
UK businesses were
more pessimistic than
the global sample as a
whole, predicting
recovery in 2011, later
than European peers such
as Germany, Italy and
Spain, who all forecast
2010.
For half of the
businesses surveyed, the
economic downturn is
prompting a change in
strategy, with changing
customer buying habits
and cashflow pressures
cited as the main
reasons for this.
Businesses in the Asia
Pacific region said they
were more likely to
adopt radical new
strategies in response
to the downturn than
those in Europe and the
UK.
In what KPMG believes
to be one of the most
comprehensive surveys to
date of global
businesses’ views on the
recession, 852 senior
decision makers were
interviewed, | |
|
| | representing companies
from 29 countries with
revenues ranging from
US$250m, to over US$
5bn.
Sue Bonney, head of
tax at KPMG Europe,
commented: “Our research
reveals the truly
seismic scale of the
impact of the current
global recession on
businesses around the
world. Although
commentators, encouraged
by a stockmarket rally,
are detecting ‘green
shoots’, UK business
does not expect a
recovery until 2011.
This is in line with the
pessimistic assessment
published by the Bank of
England recently and the
earlier findings of the
IMF that financial
crises lead to long
drawn out recessions.
What’s clear from our
survey though is that
many companies are
facing a radical
overhaul of their
corporate strategy to
reflect the rapidly
changing world.”
Key findings
Half expect
recovery in 2010 but UK
is more pessimistic,
expecting it in 2011
Globally, 11% of
respondents expected
recovery to come in
2009, 51% expected to
see it in 2010 and 22% | |
| |
| | proportion in Europe was
Ireland where 63%
expected radical change.
Bonney commented:
“The question clearly
arising from these
results is why are
European businesses so
much less likely to plan
radical changes than
their peers in the
Asia-Pacific region. It
may be that European
enterprises are more
mature, more entrenched
and may perceive change
to be too difficult.
“Indeed for some
businesses such as
manufacturers with
complex, bespoke plant,
radical change may well
be a major challenge.
The results do, however,
suggest that it could be
the Asia-Pacific
businesses that make a
virtue out of necessity
and adapt to survive in
the post-recession
world. European
enterprises run a risk
of being left behind.”
Cost control
measures planned in all
global businesses, but
especially among UK
companies
Understandably in the
current climate, cost
control was a priority
in the short term. More
UK respondents had plans
for specific cost
control measures than
the global sample as a | |
|
| | whole, with almost twice
as many UK companies
planning to reduce
headcounts than their
global peers.
Of UK respondents,
88% said they planned to
reduce procurement and
supply chain costs
against 67% globally;
84% planned to optimise
business processes (by
automation for example)
against 64% globally;
and 74% of UK
respondents had
headcount reductions
planned against just 41%
globally.
Bonney concluded:
“Whilst the UK shares
the global view that
recovery is in sight in
the medium term, our
results suggest that
British businesses are
more pessimistic than
their global peers and
that more are braced for
more pain to come in the
form of cost control
measures to get through
the downturn. Whilst
short to medium term
survival is clearly of
critical importance,
adapting to the changing
commercial world is also
crucial and UK
businesses will need to
consider their
longer-term strategies
for the post-recession
environment.” | |
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