Compared to 6 months ago… N.B country joined sample in September 2011
Global economy
Country economy
Business confidence
Number of employees
Top three concerns
Welcome to the first Sage Business Index of 2012, now our third global measure of confidence across small and medium sized businesses (SMBs) in the US, Canada, UK, Germany, Austria, France, Spain, South Africa, Malaysia and Singapore. We first carried out the Index in February 2011 with a second wave in September of 2011, so with the addition of the most recent results, we now have a year’s worth of insight into the challenges faced by SMB communities around the world.
This time 10,009 businesses took part in our survey, telling us about their mood and the business landscape they are operating in and if one thing is certain, it's that uncertainty remains.
No one is in doubt that we have seen historical changes in global economies over the past year, and this is reflected in the results of the Index. But amidst this, we are also seeing that the majority of businesses are continuing to either hold steady, or indeed grow, and their cautious confidence in their own prospects continues unabated. I think this is remarkable considering the prevailing conditions.
Looking in a little more detail, the businesses we spoke to are still feeling pretty negative about the global economic conditions, with an Index score of 43.95. This is actually slightly down from the last Index (44.47), but an interesting trend we have seen when we look at the actual percentage figures – more businesses have moved from the negative scores to being neutral, still definitely not positive, but moving in the right direction.
When it comes to whether they felt their local economies were improving or declining, it was a mixed picture. Again, overall negative, but this time a very slight improvement on September 2011, from 47.11 then to 47.26 now. This is also where we see correlation between what is happening on a macro scale, and the affect it has had on businesses. For example, in September US businesses were particularly negative about the local economy – the survey fieldwork was conducted around the time the US’s credit rating was downrated and the stock markets were in turmoil. This time, the US has indicated a lightening of attitude, reflecting the more positive news in the jobs market and generally economic improvement. In March this year, all the Euro Zone countries have seen a dip in confidence, notable in Germany who has traditionally been confident in their own economy, certainly a reflection on the continuing problems in Europe.
Despite this overall negative outlook on the global economy, I believe we can see some small green shoots of recovery. Attitudes are very slightly improving and since we began our index, businesses are growing in confidence. Over time, the index score which reflects what they feel their prospects are in the coming months have improved from 56.48 in February 2011 to 57.88 in September 2011 and 58.86 March 2012. Again, this is borne out by the fact that 67% of those we spoke to have either maintained or grown revenues over the last six months.
But there are still challenges, when we asked about the biggest concerns currently affecting their businesses, nearly half of the respondents said that rising inflation and costs of fuel, energy and raw materials was top of the list. All countries named this as their top concern apart from Spain, who cited uncertainty in the local economic market. As all businesses now know and have experienced, in straightened economic times, competition to survive is fierce and managing the cost base becomes a high priority – especially when factors like rising inflation and costs are out of their direct control.
I do hope that you find the Sage Business Index as fascinating as I do. Sage itself is lucky to have over 6 million customers across the world, and it has always been our number one priority to understand their specific challenges and needs wherever they are in the world so that we can support them in their business endeavours. As well as our day to day contact and dealings with businesses, the Index is another valuable tool for us to gain this deep insight. And, as small and medium sized enterprises account for approximately 90 per cent of businesses around the globe, we think an important measure for governments and other stakeholders too.
I would like to take this opportunity to thank all the businesses who took part in the sage Business Index, as well as our customers who put their trust in us every day, and I hope that the upward momentum we have seen in this Index continues through 2012 and beyond.
Yours sincerely
Guy Berruyer
CEO, The Sage Group plc
Populus provided online interviews with 10,009 decision makers for businesses in the UK, USA, Canada, Germany, France, Spain, South Africa, Malaysia, Singapore, Austria. The businesses were drawn from two sources:
As this is the third Sage Business Index, we have applied an index methodology which allows us to measure the changing mood of the businesses surveyed in relation to business and economic confidence. The index is based on a scale of one to 100 where 0 means a significant decline, 100 means a significant improvement, and 50 means it is no different. For the business confidence question the scale translates to below 50 as less confident and over 50 is more confident, 50 is no different.
We retrospectively applied this index methodology to the countries that took place in the first business survey in February 2011 (US, Canada, UK, Germany and France) where the questions were asked as follows:
The Sage Group plc is a leading global supplier of business management software and related products and services, principally for small to medium-sized enterprises. Formed in 1981, Sage was floated on the London Stock Exchange in 1989. Sage has 6 million customers and more than 12,300 employees worldwide. We operate in over 23 countries covering the UK, mainland Europe, North America, South Africa, Australia and India. For further information please visit www.sage.com.
Populus is an opinion research and consultancy firm that specialises in understanding the views of the general public, customers, businesses and key stakeholders. Best known for its social and political research as pollsters to media organisations such as The Times, the BBC and ITV News, it conducts large, regular, research programmes for a wide variety of clients, such as large multinational companies in retailing, food manufacturing, pharmaceutical, financial services and communications sectors, to public institutions, membership organisations and NGOs.