The British Chamber of Commerce has reported today (2 October) that the economy is still in the depths of recession. The results of the new Quarterly Economic Survey released today shows that most key Q3 balances are weaker than Q2, with the economy defined as ‘stagnant.’
In summary the Q3 survey results show the following:
No-one expects the next few years to be anything but challenging, especially if looking to refinance existing borrowing or to raise new credit. While many FDs and businesses have taken decisive action to mitigate the impact of the downturn and have implemented tough survival tactics that are undoubtedly working, caution remains about the strength and timing of the recovery.
As we move into yet another cycle best described as pre-recovery, we need to take a fresh look at the best tactics to weather the current economy and to thrive in the months ahead.
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You know we’re living in austere times when almost nine in ten businesses believe the government must do more to encourage growth.
Some 30 per cent of businesses think that reducing administrative burdens would encourage them to grow, while more than a quarter (27 per cent), feel that tax breaks would provide the best incentive for expansion, revealed from our recent study of 150 companies on the Iris Exchequer Roadshow surveying our accounting software customers.
A further 30 per cent say the uncertain economic climate will continue to be the greatest challenge for businesses in 2012, followed by operational costs (23 per cent) and staying competitive (18 per cent), with 12 per cent feeling that customer retention would be a challenge for them in the next 12 months.
John Longworth, director general of the British Chambers of Commerce (BCC), has an opinion on the challenges we are facing. He said we are living in "momentous times" with slow but seismic shifts in the world economy. With changes afoot around the globe, the UK simply cannot afford to compromise on economic performance, he claimed.
"If we fall behind, the future could be very different for our children and grandchildren," Mr Longworth stated. "Britain does have the potential to recover and make its way in the world. We have the talent, the energy, and the enterprise. All we need is an environment that puts business first." Boosting growth in our businesses will boost the economy and let Britain lead on the international stage.”
I believe that most businesses have already been through a sustained period of operational cost cutting but many are still under pressure to look for further savings. Tax breaks are just one solution that will help to encourage entrepreneurial activities and business growth, but it’s important that the government considers this as an urgent priority.
Regulations and administrative burdens will continue to hamper growing businesses, so it is important that they take time out to look at how they can improve procedures and efficiencies from the inside out.
“Britain needs an enterprise culture where people are helped into self-employment, enabling them to one say provide jobs for other people,” Longworth says. “Politicians have shown a level of resolve and determination to help business succeed this year, however, they have been nowhere near radical enough and have not been able to tackle the culture that deems business and wealth creation as negative." But the government can restore UK business confidence, he said, by facilitating the flow of credit to viable businesses, improving the UK planning system, and by overhauling the infrastructure and skills system.
With Longworth’s thoughts in mind it’s essential that businesses assess their existing processes and ensure they have the right tools and information they need to enable business growth – it’s a small but simple step towards improving efficiencies and making better, more strategic business decisions.
John Longworth concludes this point "Business is not just good for Britain, but is essential. 2012 could provide the tipping point for our economy. Not just because the next year is the nadir of a crisis, but because it provides an opportunity for lasting change. It could be a new start to an exciting future, the beginning of a renaissance in our fortunes based on enterprise, wealth creation and a new world view."
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