There were forty-three responses to the ninety-two questionnaires sent out to companies operating in Guyana. Of the forty-three respondents, only two companies (4.6%) are emphatically confident about the economy's outlook for 2002 while six companies (13.9%) are fairly confident. Thirty-four companies were either not confident (25.6%) or not very confident (53.4%) about the prospects for the economy in 2002. Unlike earlier years, there was no "Don't know".

This compares with last year's results when twenty-one respondents were either very confident (6%) or fairly confident (36%) about the economy's outlook.

When asked to assess their performance in 2001, 27 respondents (63%) consider theirs to be in line with expectations. Only 2 companies (5%) consider their performance better than they had projected while fourteen companies (33%) suffered from a decline in their anticipated performance. Of the fourteen companies reporting a decline in performance, eight have an annual turnover of over $1,000Mn, two of between $600Mn and $700Mn, one of between $700Mn and $1,000Mn, one of between $600Mn and $700Mn, one of between $100Mn and $200Mn and one with less than $50Mn. These companies operate in a range of industries including distribution/retail, manufacturing, mining, agriculture, financial and services.

Companies were asked to rate the national and international events that made them more or less optimistic about the economy. There was overwhelming pessimism on most of the issues. Issues on which greater optimism than pessimism was expressed were the PPP/C-PNC-R relationship and the publication of the Investment Code. This year's respondents showed more confidence in the country's political situation due perhaps to the Dialogue between the leaders of the country's two major parties.

The majority of the respondents are less optimistic about the world economic outlook, international terrorism/war, the level of business failures and corruption. Other significant causes for pessimism are crime/drugs, the value of the Guyana dollar, management of the economy, smuggling and Government support for business and investment.

Respondents were asked to indicate their agreement with the Government's action on three highly publicised issues. Seventy-six percent of the respondents (76%) express disagreement with the compulsory acquisition of the Toolsie Persaud Ltd. land for development into a market area for street vendors while Government's support for businesses in distress found respondents equally divided while eight companies (20%) had no views.

Only two respondents (5%) agree with the publication of the Investment Code without legal force while an overwhelming twenty-seven respondents (64%) disagree. Thirteen respondents (31%) had no views on this issue.

On a weighted average basis, respondents identified lowering direct taxation (69.8%), reducing interest rates (65.1%), and controlling inflation (53.5%) as the issues they most want Government to take action on. The areas which a significant number of respondents consider likely to impact their businesses in 2002 include consumer spending/demand (33.8%), political stability/risk (33.2%), exchange rate (32.2%), electricity supply & rates (31.8%) and interest rates (31.2%). While political stability remains a significant issue, its weighting has fallen from 43.8% in 2001 to 33.2% in 2002.

When asked what operating issues they consider most important to their business, respondents identified electricity supply and improving product/service quality. Last year the preparation of financial information was considered the most important operating issue but is ranked only third this year. As last year, Customs procedures and inventory management are considered important while environmental issues are considered least important.

 

Cash flow management, access to capital and timely information are identified as the three most critical financial issues respondents face. Of less importance are foreign currency availability, debt servicing and the build-up in receivables/ inventory.

A surprising thirty-three of the companies (79%) indicate that they prepare a formal business plan. Of these, 14 (40%) prepare their plan over a three-year period, ten (29%) for one year, 5 (14%) for 2 years, 5 (14%) for five years and one 3% for more than five years.

50.2% of the Survey's respondents identify employee productivity as the human resource issue most important for success. Other important issues are retention of key personnel (49.8%) and recruiting of key personnel (42%). Employee fraud, industrial relations and incentive schemes were the least critical human resources issues. The top three issues all speak of the importance of recruiting and retaining efficient and qualified personnel to the success of a company.

Eleven of the companies surveyed (26%) have workforces between 100 and 250 employees, ten (23%) with between 251-500 workers and nine (21%) with less than 50 workers. Sixteen percent had between 51-100 employees, nine percent between 501-1000 workers and two percent had 1001 or more workers.

Twenty-two companies (52%) had a change in the size of their workforce in 2001, a smaller percentage compared with 2000. Among those with changes, 8 companies (36%) had increases averaging 10.5% and 14 companies (64%) had decreases averaging 17%.

Thirteen of the respondents (30%) indicate that they anticipate their staff levels to grow in 2002 with seven companies expecting more than 5% growth. Ten companies (23%) anticipate decreases in their workforce of up to 20% while nineteen companies (45%) anticipate no change in the number of staff they employ.

Thirty-four of the respondents (89.5%) reward their employees with a performance-related pay component while only seven companies (21.9%) allow their employees to participate in the equity of their companies. However, thirty-one companies (84%) offer a company-wide bonus programme to their employees and twenty-eight companies (75.7%) share their financial results with their employees.

Sixty-seven percent (67%) of the respondents are engaged in domestic sales while the remaining thirty-three percent (33%) are engaged in varying degrees of export. This coincides with the results of the 2001 Survey where 64% of the respondents had a domestic focus and 36% were involved in regional/international business.

The majority of respondents (54.8%) consider that they are exposed to a great deal or fair amount of competition compared with 60.0% last year. Ten respondents (23.8%) consider that they are exposed to very little competition while 19% feel that they are not exposed to any competition at all. One respondent was unsure of any competition.

Twenty respondents (46.5%) consider that competition will increase in 2002 while fourteen (32.6%) expect the level of competition to remain the same. None of the respondents expect a decrease. Nine respondents (20.9%) either did not know or did not answer the question.

Despite their gloomy outlook of the performance of the economy for 2002, thirty-four of the survey respondents (83%) indicate that they expect their company's profitability to increase but only twenty-three (57%) anticipate increases in turnover. Eight percent of the respondents did not know whether to expect increases or decreases in turnover while twenty-seven percent anticipate a decrease. Seventeen percent of the respondents expect a decrease in profitability in 2002. The expectations of company performance contained in the 2000-2002 Surveys are as follows:

					             2000        2001        2002
						 %	 %	 %
Turnover to increase				78	76	57
Profitability to increase 			                80	82	83
Turnover to decrease 				13	12	27
Profit to decrease 				                15	18	17
No increase or decrease in turnover		                  4	  6	  8
Don't know					  2	  6	  8

The respondents who expect their turnover to increase attribute the principal reasons for this increase to improvement in their products/services (33.3%), competitive pricing (32%), increased productivity (30.5%), and acquiring competitors' market share.

In the event of limited financial resources, respondents intend to cut back on capital investment programmes (41%), advertising and PR (28.7%), research and development programmes (24%), employment cost (21%) and employment levels (20%).

Despite the gloomy outlook for the economy and the views expressed thereon by respondents, seventeen respondents (39.5%) still foresee an increase in the size of their operations. Twenty-two companies (51.1%) are not planning to change the size of their operations while four companies (9.3%) are planning to scale back.

Those respondents that are planning to scale back their operations gave as the main reasons the performance of the economy over the past year, government policy and political uncertainties.

Top growth strategies identified by those respondents who are planning to expand over the next year are the improvement of existing products (30.3%), the development of new products and /or services (29.8%) and the expansion into new domestic markets (27%).

In order to drive the projected growth of their business, twenty-five respondents plan to raise capital for the following reasons:

  To fund new products/ services  36%
  To embark on capital expenditure/expansion programme - 32%
  To retool - 28%
  To fund an acquisition, joint venture or strategic alliance -28%
  To expand into new geographic markets - 28%
  To fund current operations such as working capital - 28%
  To re-finance debt - 20%

The remaining 41.8% do not plan to raise capital.

The sources of capital that respondents are most likely to use are internally generated funds (28.8%), long-term bank debt (17.6%), disposal of assets (14.5%) and short-term bank debt (15%).