Compared to 6 months ago… N.B. country joined sample in September 2011 N.B. country joined sample in September 2012 N.B. In September 2011 and March 2012 Malaysia and Singapore samples were combined
Global economy
Country economy
Business confidence
Number of employees
Top three concerns
Welcome to the fourth Sage Business Index, a global measure of confidence across small and medium sized companies. Since our last Business Index in March 2012, we have extended the reach of the survey to include 10,861 businesses from 15 countries, this time adding Brazil, Poland, Portugal, Switzerland and Ireland. This has provided us with the clearest picture yet of the pressures and challenges faced by small and medium sized companies around the world.
With two years' worth of data at our disposal, it really has been fascinating to track the changing landscape and outlooks. While the message has come through loud and clear that small and medium sized companies have generally maintained their confidence in their own businesses and their ability to control their own destinies, the affects of the continued economic uncertainty have had a clear impact.
When asked about the global economy businesses feel that the economic outlook is slightly worse than at the start of this year, with an Index rating of 42.59 on a scale of 0 (declining) to 100 (improving), down from 43.95 in March. When it comes to their own country's economy there is more concern, with nearly a five point drop in the Index – from 47.26 in March 2012 to 42.47 this time – mainly due to the Eurozone countries. However, businesses' confidence in their own prospects paints a slightly more positive picture with an average Index score of 56.46 although this is down from 58.86 in March 2012. Again this drop appears to be mainly influenced by the situation in Europe.
We knew that when we did this Index the Eurozone crisis would indeed be a major factor in the results, so we took the opportunity to find out a bit more about its impact. Two thirds of businesses felt that the Eurozone crisis had some or significant impact on their business and only 15&perc; felt that the Eurozone could continue in its current form.
So the very fact that in light of all this uncertainty, businesses still feel confident about their prospects in the next six months is a testament to their strength and resilience. Indeed nearly 70&perc; of those we surveyed have been in business already for over 10 years and are clearly equipped to deal with the changing landscape.
Exploring this in more detail we asked businesses if they felt that they had adapted to the challenges of the economic environment over the last three years. Seven in 10 felt they had, and 88&perc; of all businesses had made changes to this effect – from cutting operational costs (50&perc;) to developing new products and services (33&perc;).
Despite the many government initiatives across the world to help small and medium sized companies, almost seven in 10 businesses still feel that their governments are just not doing enough for them. What they feel would really make a difference to their ability to survive and thrive are reducing bureaucracy (43&perc;), reducing business tax (36&perc;) and providing more opportunity for skills development (31&perc;). Of the bureaucracy, respondents felt that tax law (48&perc;), labour law (47&perc;) and public procurement procedures (32&perc;) were the worst offenders.
As a global business with over six million customers, our duty is to support small and medium sized companies and we do this by providing products and services that take care of the basics, allowing them to achieve their business ambitions. The Sage Business Index is an important part of helping us to stay close to what our customers are saying and what they are experiencing. We hope that it also proves a useful guide to governments and other stakeholders to how we can all support these businesses better.
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.
Yours sincerely
Guy Berruyer
Chief Executive, The Sage Group plc
Populus provided online interviews with 10,861 decision makers in businesses in the USA, Canada, Germany, Austria, Switzerland, France, UK, Ireland, Spain, Portugal, Poland, South Africa, Malaysia, Singapore and Brazil. The businesses were drawn from two sources:
Note: In September 2011 and March 2012 we combined responses from Malaysia and Singapore due to the smaller sample sizes. In this fourth Sage Business Index, the number of responses we received meant that we were able to represent them separately.
Brazil, Ireland, Portugal, Poland and Switzerland are all new entrants into the September 2012 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 provider of business management software to small and medium sized companies, creating greater freedom for them to succeed. Sage understands how and why each business is unique. We provide products and services that suit varying needs, are a pleasure to use and are secure and efficient. Formed in 1981, Sage was floated on the About Populus London Stock Exchange in 1989. Sage has over six million customers and more than 13,600 employees in 24 countries covering the UK & Ireland, mainland Europe, North America, South Africa, Australia, Asia and Brazil. 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.