Pictured: Ray O'Donoghue, Managing Director for Barclays
Corporate in the Midlands
A new Barclays Corporate survey of business leaders* across the
Midlands shows that the private sector remains deeply cautious
about the future of the economy.
42% of respondents said they had shelved plans to invest
recently due to current market turmoil, while 67% of corporates
expect to see more business failures in their sector and 64% view
the private sector as too risk adverse.
The survey also found that the private sector is not looking to
Government to resolve the current economic malaise; with around a
third of Midlands corporates believing the Government has the
ability to drive economic recovery and has the strategy to do so.
Another third believe the economic situation is simply too much of
a global issue for the Government to resolve.
The vast majority (88%) of respondents also said the environment
in which they do business is becoming either steadily or rapidly
more competitive, highlighting the challenge faced by businesses
today.
Despite the challenges, however, exporting remains a bright
spot. Of the corporates surveyed that export, 30% predicted the
amount of goods or services they sell aboard would grow in 2012. It
was one area that corporates were crying out for more Government
assistance, with 79% of corporates stating the Government could and
should be doing more to support trade.
Ray O'Donoghue, Managing Director for Barclays Corporate in the
Midlands, said: "It is clear that Midlands corporates believe the
economic recovery is not going to be Government led. This is not a
criticism of Government but a recognition of the limits of
Government. Businesses accept they have to compete their way to
better times.
"The challenge is back on businesses themselves. It is easy to
say no to risk taking in the current environment, but it must be
done if corporates are going to compete globally, both for the
success of the individual business and the economy as a whole."
Other key findings:
- The majority of corporates, 64%, believe having a Coalition
running the country is a positive.
- 64% of corporates believe equity investors are too risk
adverse.
- Just over three quarters of corporates are absorbing the vast
majority of input price inflation rather than passing on to
customers, with these businesses stating they are passing on just
25% or less of the input price inflation they face.
- Improving efficiency/productivity is the main tool of
corporates in the battle against the impact of inflation on their
bottom line.
*The sample was made up of businesses with turnover of $5million
or more, largely mid-large corporates.