How is business approaching the upturn? Robin Johnson of Eversheds explores the steps companies have taken to survive the recession and grow.
While economists have signalled the official ending of the recession, there is little doubt that challenging economic conditions still persist. Despite this backdrop, many companies in manufacturing have survived and some have even thrived. The question is how?
Our new report, Tools for Recovery, seeks to identify the necessary steps that businesses across the globe in all sectors, including manufacturing, have taken and intend to take to stabilise and even grow their businesses.
We asked senior business leaders to identify the measures they had put in place to drive their business out of recession. These included specific activities around driving demand, cutting cost, changing supply, investment, international trading and corporate strategy.
The study, which involved 1000 senior executives across the world, reveals a mixed picture in terms of confidence levels and how active businesses have been in trying to combat the difficult economic climate. The mood in manufacturing was above the global average in terms of economic confidence.
The headline findings from the report are summarised below – we hope you find them useful and thought-provoking.
Snapshot for Manufacturing
Confidence levels in the manufacturing sector are above the average for all sectors:
• 55% of senior business figures are more confident now than at the beginning of the year.
• 19% are less confident and 26% remain unchanged.
The top three tools for recovery deployed during the last 18 months were:
• Seeking new market segments (66%).
• Increased customer relationship management activity (58%).
• Staff reorganisations (52%).
Looking ahead to the next 12 months, the priority areas will be increasing spend on technology (44%), increased customer relationship management activity (42%) and increasing marketing spend (41%).
The international picture
Across the globe, one in four senior executives is less confident now than at the beginning of the year, however the mood varies greatly from country to country. Pessimism is most pronounced in the USA, where confidence levels have dropped since the beginning of the year, while optimism in the east continues to soar, with confidence at its peak among Chinese businesses.
Across the globe, it is evident that businesses have put in place a combination of measures to combat the difficult economic climate. Most prominently, these have included proactive business development activities. In fact, an increased focus on customer relationship management was the most popular tool that was deployed across the globe, closely followed by seeking new segments in the market.
However, as well as positive proactive measures, there have been some difficult decisions to make during the last couple of years and 46% of respondents confirmed that they have made cuts to discretionary spending.
Looking ahead, the research shows that businesses will continue to drive demand, but also have a stronger appetite to invest in three key areas – staffing levels, marketing activity and research and development projects.
Head of Eversheds’ industrial engineering sector group
For a full copy of the Tools for Recovery Report, please click here