British businesses have a less than favourable view on what lies ahead in the economic crisis, according to a global survey conducted by trade credit insurer Atradius.
Atradius surveyed 3,500 businesses around the world on how they have been impacted by the economic crisis and their views on the future. Their findings revealed that the British have a more negative view in many respects than their foreign counterparts.
In terms of business failures, the companies surveyed still anticipate trouble ahead for businesses in ‘distressed’ industries, such as the automotive and retail sector. A total of 71% of respondents believe there will be an increase in company failures over the coming months. Even companies in industries that are not ‘distressed’ such as food, are expected to struggle, with 52% believing they will also see an increase in company failures.
Only 9% expected failures to decline, making the UK one of the most pessimistic groups surveyed. With specific reference to the financial sector, 55% of UK respondents anticipated the ongoing failure of small and mid-sized financial institutions whilst 39% still expect to see failures amongst the larger banks.
The survey also recorded changes in the ways the UK does business. According to findings, trade credit insurers aren’t alone in performing more frequent, more detailed assessments of businesses and requiring more up-to-date information. A total of 47% of respondents have been keeping a closer eye on their buyers, increasing the frequency of their reviews of creditworthiness due to the economic situation. This trend is one that runs through all of the countries surveyed. In addition, 43% of those surveyed have increased the number of buyers from whom they have changed credit terms.
The other notable change in the UK is that 56% of the respondents have increased their pursuit of new markets or sales channels for their products and services and 51% are maximising the assets they already have and are increasing their focus on customer service – although 33% have reduced the size of their workforce.
The survey found that in most cases across the globe, a fairly sizeable percentage of respondents made no changes in the way they conduct their business. At least 40% of respondents in no fewer than half of the countries surveyed have made no change in their actions due to the economic crisis in all areas accept the use of cash sales, credit sales, the pursuit of new markets for their products and in their focus on customer service.
With regards to government initiatives, 29% of UK respondents have used the government’s stimulus programmes, the second highest rate after China, and 26% of respondents felt the government was doing enough to stimulate the economy. In addition, 14% said government schemes had enabled them to continue to sell goods and services on credit and 10% said they had helped with the sourcing of other financing. Despite this, 48% felt that government efforts had not had any impact on their businesses.
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