Polson Higgs
Its Amazing What You Learn When You Ask
22nd August, 2009 | 12:25 pm| By Graham Crombie - Audit and Assurance Services Partner
The year continues to slip away quickly and many of us are focusing on keeping our businesses working as well as we can in a challenging environment.
As I travel around the country and overseas I am often asked what’s happening in our region. At Polson Higgs we get to meet a lot of people in a wide range of business activities who provide a lot of feedback.
We have decided as a firm that the best way to understand what is happening and make some sense of all this feedback is to ask!
Along with McCulloch and Partners, a firm based in Invercargill and Queenstown we complete a six monthly survey of South Island business leaders to try and capture the issues that are currently driving their thinking.
Our latest survey (August 2009) has just been released.
On the whole there are some positive signs. The big picture is that while many businesses are still concerned that their growth will be handicapped by a slow recovery they are significantly more optimistic than they were in December 2008. Only 20% (40% in December 2008) are expecting their business to shrink. Most see 1% to 5% growth the likely position going forward.
It is interesting to see where firms are investing. Business leaders reported they are most likely to have increased their spending in;
- Sales and marketing
- IT infrastructure
- Staff training
They are likely to have reduced investment in;
- Plant and equipment
- Research and development
This is suggesting that they are focusing on improving short term financial results through sales and efficiency gains over long term investment.
From a strategy point of view businesses appear to be focusing on sorting internal structures and securing lower cost finances as interest rates fall. There is less emphasis on rising price margins and securing trained staff reflecting the current labour market.
We asked what the three major challenges facing their business would be over the next five years. Controlling costs, improving efficiency and finding new customers have become the more common responses as opposed to retaining existing customers, succession planning and controlling costs which indicates we are moving through the economic cycle and becoming more positive.
There is also a greater emphasis on new products and customers indicating growth is back on the agenda.
These results are encouraging and support the view that, while times are difficult, we are moving through the economic cycle.
We are continuing to work with clients in these areas to try and position them for growth once the economy recovers
If you would like more details on the above results or further details on the Human Resource trends coming out of the survey please contact me on graham.crombie@ph.co.nz
We would also value your feedback in our next survey. Please drop me a note and I will add you to the database.
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Last updated: 26th Aug, 2009 | 10:57 am
