The 2002 Survey saw a 40%
response rate with thirty-eight companies responding to a total of
ninety-five questionnaires sent out.
The Survey group, though somewhat smaller than previous years had a
similar makeup to that of previous years with the majority of respondents
representing the distribution/ retail, manufacturing and banking/ finance
2002 continued a series of
difficult events over the past several years including the El Nino/ La
Nina weather patterns, two highly contentious general elections,
international terrorism and increased crime locally. Despite these
conditions, there is evidence that a significant proportion of businesses
are determined to carry on with their plans for expansion although they do
appear to have contingency arrangements should conditions deteriorate.
Confidence in the
economy: Six of the respondents (16%) remain fairly confident about
the economy’s outlook for 2003 while one is very confident. Fifteen
(40%) are not very confident while
twelve (32%) are not confident at all. This compares with last year’s
results where 14% were fairly confident, 53% not very confident and 26%
not confident. Seventeen (44%) of the respondents are planning to increase
the scale of their operations in 2003 while 13% are planning to scale down
with 42% planning no changes.
(20) respondents or 53% believe that economic conditions would be worse
for privately owned businesses in the next twelve months than the past
twelve months compared with 44% which believe conditions would be no
different and 3% which believe that they would be more favourable.
Performance in 2002: When
asked to assess their performance in 2002, twenty-one (55%) of respondents
reported results worse than they expected, 22% more than in the previous
year. Only 13 respondents (34%) considered their 2002 performance to be in
line with expectations compared with 63% in 2001 while four respondents
(11%) reported that their performance was better than they expected.
on the economy: From
a list of fifteen items, respondents were asked to rate what national or
international events, if any, made them more or less optimistic about the
economy. In none of these issues did respondents express more optimism
than pessimism. The issues which respondents were most pessimistic about
included the local crime situation, international terrorism and war, the
level of consumer confidence and corruption.
with Government’s decisions: Respondents were asked their views on the Government’s handling of
three issues: measures put in place to deal with the crime situation, no
bailout for distressed entities and the stalled dialogue between the
President and Leader of the PNC/R. In each case, the majority of
respondents were not satisfied (67%, 44% and 46% respectively) with the
decisions taken by the Government.
for Government to act on: The issues which the Survey group would most like the Government to deal
with are implementing a plan to tackle crime (86.8%), lowering direct
taxes (55.3%), enhancing governance (55.3%), controlling inflation (44.7%)
and implementing a long-term plan to assist manufacturers.
to impact on business in 2003: Companies were asked to rank 29 external factors most likely to impact on
businesses in 2003. On a weighted basis respondents identified the crime
surge, political stability (risk), electricity supply and rates,
consumer spending power and
lack of confidence in the economy. In 2002 crime and lack of confidence in
the economy were not considered serious concerns. Instead, exchange and
interest rates were matters of greater concern.
most important operating issues: The three most important operating issues are security/ crime,
electricity supply and improving the quality of products/ services
offered. While security/ crime was not an issue in 2001, both electricity
supply and improvement of products/ services were ranked as the top
most important financial issues: Access to foreign currency, cash flow management and timely flow of
financial information are the highest ranked financial issues this year
compared with cash flow managment, access to capital and timely flow of
information in 2001.
All respondents to the Survey review performance against their budgets. Eighty-two
percent (82%) do this on a monthly basis, 7% quarterly, 5% half-yearly and
2% bi-monthly. Seventy-nine percent (79%) of these companies claim that
they operate with a formal business plan with 11 companies (34%) preparing
projections for a three-year period, 9 (28%) for a one year period 5 (15%)
for a two-year period, 3 each for five years and more than 5 years
respectively and one for four years.
percent (48%) of respondents reported changes in their workforces. 10% had
increases averaging 6.5% while 19% had decreases averaging 26%. 70% of the
respondents did not provide ranges for increases or decreases in
workforces. Thirty-nine percent (39%) of respondents expect no changes in
workforce size in 2003 while thirty-two percent (32%) project increases
and twenty-four percent (24%) project decreases.
Although retention of key personnel
is a key HR issue respondents consider employment levels and
employment cost as two likely areas they will cut back on if faced with
34% of the Survey group are engaged in exporting their products
to various markets. Twelve companies export to Caricom,
six companies to North America,
two companies export to South and Central America, six companies export to Europe
and two companies export to other markets.
32% of the
respondents are not exposed to any foreign competition while 21% are
exposed to just a little. 18% are exposed to a fair amount while 26% are
exposed to a great deal of foreign competition.
The expectations of company performance over the past three years is as
increase or decrease in turnover
respondents who expect their turnover to increase attribute the principal
reasons for this increase to competitive pricing, entering new markets,
product/ service improvements and increased productivity.
In the event
of limited financial resources companies are most likely to cut back on
their capital invesment programmes, employment levels, advertising and PR
and employment cost. To cushion the effects of recent financial
difficulties, respondents propose to pursue cost reduction exercises,
entering new markets, providing more training to staff and new product
development as initiatives they would pursue.
The local crime situation, political uncertainties and the performance of
the economy are all reasons for respondents planning to scale back their
operations in 2003.
top strategies identified by respondents planning to expand in 2003 are
improvement of existing products, new product/ service development,
upgrading of technology and and investment in advertising/ PR
order to drive the projected growth of their business, twenty-three
respondents plan to raise capital for the following reasons:
finance capital expenditure programmes
new products/ services
current operations such as working capital
Respondents are most likely to use cash flow/ operating profits, long-term
bank debts, joint-ventures and short-term bank debts as chief sources of
capital in the upcoming year.
The following pages offer a more detailed
evaluation of the responses.
About the Survey Group
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How They See It
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How They Will Do It
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