Enterprise Survey Report 2009

The findings of our survey, undertaken in June 2009, provide insights into the impact of the downturn and its effect on businesses’ growth plans.

Key findings from the UK report

The increased impact of the downturn resulted in difficulties in forward planning, reducing revenue growth, increased cost of borrowing and reduced planned staffing levels.
A majority of businesses report a reduced ability to invest in capital expenditure and nearly half claim a reduced capacity to finance day-to-day operations. Consequently, UK businesses are prioritising the need to increase cash balances and pay down debts.
A majority of UK businesses expect the effects of the downturn to last one to two years at least until the latter part of 2010 or into 2011. However, nearly a quarter are more pessimistic.
A majority (54%) of respondents thought the UK regulatory and taxation environment to be either ‘not very’ or ‘not at all’ business friendly. Employment tax and legislation and business tax changes were all regarded as a key hindrance to business.

Increasing profitability is the key business objective in all regions except the Gulf. Some businesses in Europe (and to a lesser extent the Gulf) are prioritising the need to increase cash balances and pay down debts, whilst some businesses in the US, Asia and particularly the Gulf place greater focus on increasing rewards for shareholders or owners.
Businesses generally expect the downturn to last one to two years, at least until the latter part of 2010 or into 2011. However, nearly half Asia and 40% of Gulf respondents were more optimistic.
Despite global adverse conditions, many businesses are still planning to grow and expand in new markets but continue to identify a large number of barriers to international growth. However, some barriers related to the availability of skilled staff have eased.
Among the other positives from the credit crunch identified by businesses are weakened competitors, and increased opportunities to acquire businesses.

Businesses’ attitudes to their domestic regulatory and taxation environment varied significantly.

The UK and continental EU were the least positive with only 53% and 56% respectively reporting a positive business environment.

This compared with 78% in the US, 87% in the Gulf and 90% in Asia thinking their domestic regulatory and taxation environment are business friendly.

For further information or to request a hardcopy of these reports, please email enterprise@icaew.com