The Current State of Play is an annual analysis which measures business confidence, trends and management behaviour of both large companies and small and medium enterprises (SMEs) in Australia and New Zealand. The study was conceived in 2008, during the height of the global financial crisis and designed primarily to assess the ‘state of play’ of companies, as they emerged from the credit crisis and the subsequent economic downturn.
This year’s report, Managing in a Multi-speed Economy (2011–12), is the third in an annual series by Newport Consulting and follows Managing in Uncertain Times (2010–11) and Managing in a Downturn (2009–10).
The report examines how confident companies are in these challenging economic times and asks: Is the outlook for companies more ‘cautious’ than last year? What are the key business strategies companies are adopting to remain competitive? What are the differences between SMEs and large companies in their approach to managing growth and, is productivity a critical business issue in the present climate?
- There is heightened unease in the business community, with 26% of surveyed companies expecting difficult conditions in 2011–12, up 6% on last year.
- Only 15% of Australian companies are very optimistic about their growth expectations. This has noticeably fallen from 39% last year.
- Of the surveyed companies, 14% expect no growth at all this financial year, up 6% from last year.
- More companies are revising down their growth expectations, with 18% of surveyed companies expecting only 5% or less growth this financial year. This is up 10% on last year.
- Of the surveyed companies, 25% feel the economy is slowing – up 10% on last year. There has also been a decrease in the number of companies expecting the economy to grow.
- Of the surveyed companies, 11% are reducing staff, up 8% on last year, indicating changing economic times.
- Innovation has emerged as the way forward for companies to meet their growth expectations. A quarter of the survey’s respondents have identified new product or service development as a strategy to meet their forecasts.
- Improved service and increasing market share are the next two highly ranked sources of growth for companies for the year ahead.
- The state of the economy is the highest ranked challenge (53%) for business leaders. This is followed by cost management (51%) and recruitment and retention (44%).
- Skills development (58%), customer satisfaction (58%) and productivity (51%) are the three most identified opportunities for the year ahead.
- Productivity is on the agenda for business, however it is generally an area that lacks decisive and dedicated action.