09 October 2008
The global financial crisis is taking its toll on business confidence but finance directors are determined to use tried and tested means to weather the storm, according to a new survey by the Chartered Institute of Management Accountants (CIMA), published today.
Over a quarter of businesses in varying sectors that include manufacturing, retail, transport and finance expect the number of staff their organisation employs to be reduced over the next 12 months. Those most at risk will be temporary staff and external consultants with 42% of those surveyed expecting their numbers to be cut.
The research is a stark contrast to that of six months ago when 40% of companies expected growth in staff numbers. With a third of firms now reporting that sales have declined in the past quarter, those still positive of growth has dropped to only 37%.
Yet despite tales of economic woe, the survey of leading British finance directors show the majority of firms are determined to weather the storm and come out the other side with many planning to invest their way out of recession. Around three quarters of firms were planning to maintain or increase spending on marketing, staff training and capital expenditure. Just 5% of firms said they would be cutting back on new product development.
Responding to government calls for wage settlements to be kept at or below current inflation levels, only 3% reported plans to raise salaries above inflation. Equally just 6% plan a freeze and the majority planned to stick to the chancellor's guidelines, although one in five said they were still waiting before deciding.
When it came to getting out of the downturn forty per cent of the finance directors wanted the government to prioritise stabilising the financial markets but they were split on the Bank of England's MPC with half wanting them kept on hold and 40% calling for a cut.
Charles Tilley, CIMA Chief Executive, said:
'While unprecedented events have unfolded since this survey was undertaken in mid September, it is clear our members are determined to use their robust financial skills to manage the short term survival of their businesses while keeping an eye on the medium term.
'CIMA members hold the purse strings of some of the UK's leading companies and the spotlight is on them to play a vital role to lead their companies out of this bleak situation during these exceptional times. It is hoped the Government's financial support package for banks together with the Bank of England 0.5% interest rate cut will help kickstart the confidence and flow of credit so badly needed.'
ENDS
For further information, please contact:
Lottie Muir
Press & PR Manager, CIMA
T: +44 (0) 20 8849 2407
m: 07917 548475
lottie.muir@cimaglobal.com
Notes to editors
CIMA (the Chartered Institute of Management Accountants) is the only international accountancy body with a sole focus on business. It is a world leading professional institute that offers an internationally recognised qualification in management accountancy, focusing on accounting in business in both the private and public sectors. It is the voice of 164,000 students and members in 161 countries. CIMA is committed to upholding the highest ethical and professional standards of members and students, and to maintaining public confidence in management accountancy. For more information about CIMA, please visit http://www.cimaglobal.com/.
CIMA is responsible for the education and training of management accountants who work in industry, commerce and not-for-profit organisations and has more members in the public sector than any other UK based accountancy body. CIMA prides itself on the commercial relevance of its syllabus, which evolves continually to reflect the latest developments in global business. CIMA has been awarded superbrand status in the UK for a second year in a row this year and for the first time in Sri Lanka.
The CIMA Quarterly Economic Survey was conducted among 200 Finance Directors between 1-15 September 2008.
CIMA has set up a 'Leading in an economic downturn' area of its website to provide the latest tools and techniques to help people manage their business and career through the downturn. Please visit www.cimaglobal.com/downturn
09 October 2008081009