Australian private businesses: upturn ready or not
(20 October 2009 – Australia) Private businesses have weathered the economic crisis well, but must now focus on planning for the upturn or risk losing market share, according to the sixth edition of PricewaterhouseCoopers Private Business Barometer released today.
PricewaterhouseCoopers partner Gregory Will says, "Private businesses felt
the impact of the global financial crisis and went back to basics in order to
survive, however there is a real risk that they won’t be prepared for the
upturn."
"While we are seeing signs of recovery in the capital markets, as many as 80 per cent of private businesses are not planning for the upturn. The private businesses that are agile and prepared for the next cycle will steal the march on their competitors.
"Private businesses need to look forward and act to combat the stiff competition from businesses that have planned for the upturn and will emerge from the bunkers ready to hustle," Mr Will says.
East & Partners Principal Analyst Paul Dowling says, "It is clear that private businesses still face an uphill battle in steering through the current economic environment. Nevertheless, a growing number of businesses see the hilltop drawing near and are expecting a smoother ride as the economy leaves the worst of negative growth behind."
The PricewaterhouseCoopers Private Business Barometer, in conjunction with East & Partners, asked challenging questions of 758 private business owners with an annual turnover of between A$10 to $100 million.
Their responses provide insight on growth, funding, operations and people to paint an overall picture of how private businesses are managing their risks and opportunities.
Key findings from Barometer VI
Private businesses have weathered the storm: While growth has slowed, private businesses still outstripped the performance of the general economy, increasing sales by an average of 6.8 per cent and profits by an average of 5.8 per cent.
Only one in five businesses are preparing for the upturn: Businesses seem more focused on short-term performance rather than positioning to exploit a return to economic growth.
Funding remains the top challenge: Private businesses’ ambitions are constrained by the difficulty of accessing funding.
Pricing driving competition: Nearly one-third (30.4 per cent) of businesses now rank price as a key driver of competition, up from 11.7 per cent in February 2007. Manufacturing, retail and property are most affected by the pressure on margins resulting from the downturn.
Wage costs constraining hiring: With softening demand reducing the competition for talent, businesses are seeing higher wage costs as their major hiring constraint.
To view the Private Business Barometer, download a copy or listen to webcasts on the findings, please visit www.pwc.com.au/private-clients
"While we are seeing signs of recovery in the capital markets, as many as 80 per cent of private businesses are not planning for the upturn. The private businesses that are agile and prepared for the next cycle will steal the march on their competitors.
"Private businesses need to look forward and act to combat the stiff competition from businesses that have planned for the upturn and will emerge from the bunkers ready to hustle," Mr Will says.
East & Partners Principal Analyst Paul Dowling says, "It is clear that private businesses still face an uphill battle in steering through the current economic environment. Nevertheless, a growing number of businesses see the hilltop drawing near and are expecting a smoother ride as the economy leaves the worst of negative growth behind."
The PricewaterhouseCoopers Private Business Barometer, in conjunction with East & Partners, asked challenging questions of 758 private business owners with an annual turnover of between A$10 to $100 million.
Their responses provide insight on growth, funding, operations and people to paint an overall picture of how private businesses are managing their risks and opportunities.
Key findings from Barometer VI
Private businesses have weathered the storm: While growth has slowed, private businesses still outstripped the performance of the general economy, increasing sales by an average of 6.8 per cent and profits by an average of 5.8 per cent.
Only one in five businesses are preparing for the upturn: Businesses seem more focused on short-term performance rather than positioning to exploit a return to economic growth.
Funding remains the top challenge: Private businesses’ ambitions are constrained by the difficulty of accessing funding.
Pricing driving competition: Nearly one-third (30.4 per cent) of businesses now rank price as a key driver of competition, up from 11.7 per cent in February 2007. Manufacturing, retail and property are most affected by the pressure on margins resulting from the downturn.
Wage costs constraining hiring: With softening demand reducing the competition for talent, businesses are seeing higher wage costs as their major hiring constraint.
To view the Private Business Barometer, download a copy or listen to webcasts on the findings, please visit www.pwc.com.au/private-clients
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