Midlands’ professional services firms have spoken! The Government needs to get the economy moving through increased access to finance, not advice or training or further VAT rate changes. That’s according to more than 80% of respondents who took part in the Regional Economic Outlook Survey*, developed and conducted by Birmingham Forward on behalf of the West Midlands Business and Professional Services (BPS) organisations.
The survey, was sent to members of all six Business and Professional Services organisations representing BPS businesses across the Midlands covering Birmingham, the Black Country, Coventry & Warwickshire, Telford and North and South Staffordshire*.
Members firms were questioned on a wide range of issues including turnover, employment, training, graduate recruitment and cash-flow.
When looking at turnover the survey reveals that almost half (44.9%) of respondents have seen their annual turnover decrease since June 2008, on average by 22.03%. However, more than 30% (32.9%) report that turnover for this period actually increased, on average by 22.37%.
Looking forward to June 2009, 38.8% expect their turnover to decrease, against 36.7% that expect an increase and 25.3% that predict things to remain the same.
Despite this mixed outlook, by December 2009 more businesses than not expect their turnover to increase rather than decrease. In total, nearly 40% (38.6%) believe their turnover will increase, against 29.7% that say it will decrease and 31.6% that expect turnover to remain the same.
Richard Brennan, Chief Executive of Birmingham Forward comments:
“Like other Business and Professional Service organisations, Birmingham Forward has a crucial role to play in creating the right conditions for economic growth. We therefore felt it was important to gain an insight, by analysing the data gained through this survey, into the challenging market conditions that businesses are facing, both now and in the near future. This is the first time that all six BPS member organisations have worked together on a survey of this scale. From this I believe we have created a powerful and revealing picture of the economic outlook across the Midlands to share with a wider audience.”
Key findings from the survey include:
- When BPS firms talked to clients, as well as looking at their own businesses, more than half (57.4%) of those surveyed said that they expect the downturn to last into 2010 and 19.6% beyond 2010. Only 6.1% expect the downturn to last around six months.
- When asked in order of priority what the three most important things the Government can do to get the economy moving, 80% of respondents said access to finance, followed by public projects (53.6%) and a tax holiday (48%).
- The lowest ranked priorities for respondents and therefore the least important things the Government can do to get the economy moving were VAT rate change (12.4%) and funding of external advice and training (25.4%).
- Job losses are expected to continue over the next six months as the survey reveals that nearly a quarter of all respondents (23.2%) plan to reduce employment, on average by 10.8%, while only 14.1% plan to add employees, with 62.7% expecting no change in payroll numbers.
- For many, training and graduate recruitment has been put on hold. Nearly three quarters of all respondents (70.1%) said they were not recruiting graduates. All of those who responded to the survey said that the recruitment of graduate trainees has decreased compared to plans 12 months ago, in some cases by 35% or more.
- Over half of respondents (58.2%) said that despite the current economic climate, employee training will remain the same over the next six months. However, 19.2% said that training will continue but at a reduced rate and 14.1% admitted that training was on hold. Only 8.5% said that there would be more training implemented to help counter the current economic environment.
- When asked about working hours over the next three months, the majority of respondents said they expect their working hours to remain the same (71.2%), whilst 14.7% expect to reduce their hours and 14.1% expect to increase their hours.
The results go on to reveal that despite a requirement by the Government for organisations in the state sector to pay their bills within ten days, nearly half of all respondents (49.9%), said this had not happened, or if it was, it was only happening some of the time.
Richard Brennan continues:
“Clearly the businesses that we surveyed are united. They want access to finance. It is no surprise that this is a key concern for the majority of respondents, especially when you look at payment issues. In one instance 80% of all those we questioned said they were experiencing a problem with debtor payments. The survey also makes clear that our sector along with all other areas of business and commerce are experiencing extremely difficult and challenging trading conditions and there are little signs of recovery yet emerging.”
Notes to Editor
The Six regional BPS membership organisations are:
- Alliance 4 the Black Country
- Birmingham Forward
- Coventry & Warwickshire
- Finest (covering North Staffordshire)
- Success (coverage South Staffordshire)
- Telford Business Partnership
The survey was conducted between 9th February – 3rd March 2009
