According to a global survey undertaken by Regus plc (www.regus.com) of over 11,000 corporates across 15 countries, strong economic recovery is not expected to begin until summer 2010.
In India, however, firms expect significant recovery to begin in March 2010. The findings indicate that companies will need to maintain their cost management strategies into the New Year and structure any major investments to catch the wave of mid-year global recovery.
Regus’ multi-national global economic indicator survey, the Regus Business Tracker, quizzed more than 11,000 respondents about their companies’ financial performance as well as their expectations for personal and nationwide economic recovery. The resulting data offers economists a consistent survey benchmark with which to assess national economies versus global averages.
The Regus Business Tracker survey found that Indian firms expect to see signs of recovery in March 2010, which indicates a level of optimism that far surpasses the global average. Of the countries surveyed, India’s prediction of March 2010 is the most optimistic.
India’s corporate outlook on economic recovery coincides with an increase in profits that surpassed the international average: 45% of Indian firms saw profits increase last year, versus 40% of companies globally. Likewise, 49% of Indian companies experienced an increase in revenues last year (versus 46% globally). Even amongst those that experienced a decrease, 56% expect revenues to rise in 2010.
Regus’ survey revealed an almost exact consensus between high- and low-performing firms with regard to the timing of economic recovery, indicating that their collective views were not skewed by individual performance. That said, both high- and low-performing Indian businesses agree that they can look to March 2010 for marked economic advancement.
Variations by Company Size
When it comes to corporate size, 57% of Indian companies of all sizes indicated that they expect revenues to increase next year, while small Indian firms (with fewer than 50 employees) are more optimistic about next year’s figures than their larger counterparts. 85% of SMEs expect to see their revenues increase in 2010, compared with 72% of large companies. This suggests that small businesses will lead the economic recovery, and highlights the importance of government support and growth incentives for a section of the business community that is responsible for around half the nation’s turnover.
Equally, the survey revealed several significant differences between the concerns of SMEs and larger firms. Big businesses are worried about cost management, infrastructure management, and staff retention, all of which registered as above-average concerns. SMEs, on the other hand, are overwhelmingly concerned with marketing and customer retention, indicating that they are more worried about maintaining and nurturing profitable business than with cutting costs.
Mr. Madhusudan Thakur, Regus’ Country Head, comments: ‘Although signs of global economic recovery are starting to emerge, businesses across the services industry are remaining cautious. The relatively positive prediction from Indian firms has to be tempered with an element of caution, with astute firms remaining tightly controlled in the beginning of next year.
“Looking forward to India’s recovery period, the bullishness of small businesses may indicate that government needs to look at the levels of support being offered to SMEs. In our economy, SMEs represent about 50% of business turnover, and ignoring this community could have a significant delaying impact on national recovery. As we proceed along the road to recovery, there is an urgent need for businesses experiencing growth to not return to their old ways of doing business, but to take the opportunity to learn from the past and make changes to their future strategies and operations. This may mean shifting the way firms organise their workforce, or indeed whether they retain the same proportion of on-site, full time employees as they did before the global recession. New workforce and workplace strategies are two of the main areas where companies can look to substantially re-engineer their cost-base and move towards wider infrastructural change.”
The Regus Business Tracker surveyed 11,007 business respondents from 15 countries from the Regus global contacts database were interviewed during August and September 2009. The Regus global contacts database of over 1 million business-people worldwide is highly representative of senior managers and owners in service businesses across the globe. In this first research project to be publicly issued, respondents were asked about their recent revenue and profit trends, along with their future views on a number of issues including the timing of substantial economic recovery in their country. The survey was managed and administered by the independent organisation, Marketing UK.