Global economic growth is progressing steadily, but full recovery will not be reliably under way until December 2010, according to the latest edition of the bi-annual Regus BusinessTracker survey.
The survey’s 15 000 respondents reported a higher percentage of businesses seeing revenue and profit growth than were experiencing decline. However, respondents, who were asked “When do you expect economic recovery and growth to be advancing strongly and reliably in your country?” have now shifted their expectation of the full momentum of economic recovery back five months, from July to December.
In South Africa specifically, net growth companies are positive at 14%, but optimistic recovery expectations have shifted a little from May 2010 to October 2010.
The key findings of this worldwide survey emphasize that the business community needs to retain an element of caution in their optimism. The study revealed net growth, with 12% more firms reporting a rise in revenues rather than a decline, and 8% more companies experiencing an increase in profits rather than a reduction.
However, businesses across the globe need to stay focused on strategies for cost management, streamlining and greater operating flexibility.
The second edition of the Regus BusinessTracker international economic indicator survey was conducted in over 75 countries and canvassed over 15 000 respondents about the financial performance of their companies and their expectations for growth.
The survey also analysed the effects of company size on economic expectations and stimuli. In South Africa 83% of businesses (70% globally) expected revenue growth in the coming year. Fewer small sized businesses than the global average (42%) had experienced a rise in revenues, in spite of bullish predictions made in light of the coming World Cup hosting.
Small companies remain, however 14% more positive than average (70%) that they will experience a rise in revenues in the coming twelve months. When asked about the measures they believed would be most effective in aiding the recovery, 30% of businesses (globally 21%) advocated the promotion of inward investment , while 31% of businesses (globally 21%) emphasised the importance of the creation of more public sector jobs.
The survey also analysed sector differences, finding that in spite of the media hype generated by the World cup, 11% fewer companies the media and marketing sector recorded a rise in revenues (globally 42%). In keeping with the country’s characteristic bullishness, however, 30% more media and marketing companies than average are expecting a rise in revenues in the coming year.
Mark Dixon, chief executive of workspace solutions provider Regus, comments: “Despite the slippage between expectations and real experience of business growth observed in this latest survey, it is important to emphasize that the experience of growth is overall still positive around the globe, with South African exports rising strongly since the second quarter 2009 and predicted GDP growth of 4% in 2010.
“An important caveat remains, however; commentators everywhere agree that businesses must take some important lessons away from the downturn. In particular the restructuring of workforces and workplaces should become a continuing process as the flexible working practices which helped weather the recession have yielded a number of positives for employers and employees alike. Anecdotal evidence gathered by Regus from its operations globally indicated that the shift from traditional commercial property leasing to solutions that accommodate more flexible working systems is certainly underway and likely to play a large part in the coming recovery.”