So the big decision has been made in the US, and congratulations to Barack Obama on four more years as President of the United States of America.

With this and all things American being in the news, we wanted to take a look at the latest results of the Index from the US; along with how things have changed in the time we have been running the Sage Business Index.

Looking more at the role of government, in the Index, 53% believe the support they receive from the government is not sufficient, however when looked at globally this is the joint lowest with Canada, suggesting Americans are among the most supported, supported by 23%, the 3rd highest globally saying they felt the support they received was sufficient. One example of work done in the first term is the Small Business Jobs Act, promising tax cuts for small business and ease of getting federally guaranteed loans, but are small and medium sized businesses feeling the benefit of work such as this?

In part yes, when we examine the confidence to which US businesses feel their business will grow in the next six months, looking across the last four set of results of the Business Index, in February 2011 54% of respondents felt more confident, increasing to a high of 61% earlier this year in March 2012, slightly dropping 60% in the most recent results, illustrating confidence has increased in business owners.

However when asked if this confidence of their own businesses also transferred to the economy in general, the picture is a little different:

• At its height, in February 2011 51% felt the economy was improving
• In September 2011, confidence dropped as only 42% of customers and small business owners felt economy was on the up
• Improvement was seen earlier this year however, bouncing back to 49% confidence in March 2012
• Finally, this year’s results saw confidence level out at 48%

With inflation, rising costs of energy, fuel and raw materials still one of the primary concerns, and 53% responding the major issue for them is reducing the national debt, it seems that the outlook is bleak however when we dig a little deeper into the results revenue has increased or remained steady for 72% of business an increase of five points from 6 months ago, and 83% are making positive changes in their businesses to cope with the changes in the economy.

President Obama’s acceptance speech on re-election night included the phrase ‘The Best Is Yet to Come’, many Americans, including the small and medium sized business owners will be hoping this is true.

What do you think? Can and should governments be doing more to support small businesses? What would really have the biggest impact on you?

The British Chamber of Commerce (BCC) this week announced it expects GDP to expand slightly in the first quarter of this year. This new growth is set to be driven by UK factory output according to the findings. Separate figures from a purchasing managers’ index (PMI) compiled by Markit show a rise to a 10 month high for the manufacturing sector in support of the BCC’s findings.
Meanwhile the OECD figures released last week told a slightly different story, claiming the UK economy would contract in the first three months of 2012 and this is likely due to the OECD polling the non-manufacturing sectors namely the services industry.
What is clear is that UK businesses are looking set to out-manoeuvre the more difficult economic conditions to avoid a “true” double-dip recession. Our own Sage Business Index which recently polled over 10,000 SMEs across 10 countries is testament to this outlook.
This study shows that despite continued uncertainty in the macro global and local economic conditions, attitudes are improving slightly and businesses are still positive about their own prospects over the next six months. Stubborn price pressures particularly in the rise of the cost of fuel will ensure that growth will however remain slow. The biggest overall challenge faced by businesses we polled relates to rising inflation, costs of energy, fuel and raw materials – 50 percent selected this as their number one concern. This is followed by uncertainty and instability in the local markets (35%) and then reduced cashflow in the supply chain (28%).
However there is also evidence that businesses have maintained or increased their revenues in the last 6 months and still show cautious business confidence in their business prospects in the next 6 months, despite a general sentiment that global and local economies are now in decline.
Given the difficulties faced by countries in the Eurozone and continued austerity measures across all geographies, these are still an encouraging set of results.

The Deutsche Börse AG and the Institute for Supply Management this week released the findings of its annual Chicago Business Barometer Report (CBBR). This edition shows business conditions have improved for the 28th consecutive month in the US although there are also signs of a slowdown in the economic recovery – you could say not entirely unexpectedly given the harsh trading environment last year across all geographies. Importantly however the index also points towards US businesses still having a positive outlook in spite of the present global conditions.

If we compare these results with the findings of the 2011 Sage Business Index, US SMBs’ attitudes towards future prospects had already started to improve towards the end of 2011 and while no-one could have accurately predicted the Eurozone crisis; this was still in the context of an overall cautious optimism. Big on the list of future plans then was the idea of investing in the “future”. For SMBs in US, Q4 of 2011 was about investment in sales, marketing; innovation through technology and diversifying into new markets. One US business owner is quoted saying: “Those who are more innovative, adaptable and efficient will survive.”

It would appear the US SMB community is sticking to the plan.

Last year’s respondents from the Sage Business Indices where snapshots of attitudes towards business outlooks were taken first in February and again in September, showed cautious optimism early in the year that only marginally improved by the Autumn. And with the exception of Spain – that marginal improvement was mirrored globally.

Broadly speaking when it came to global economic confidence, the general mood was that global confidence was declining, with the UK and US the least optimistic of all regions. Compare these results with their feelings about local economies and the picture was decidedly mixed. Canada’s SMBs appeared upbeat while the US and most of Europe were much less so. One exception were Germany’s small enterprises – relatively speaking they were positively brimming with confidence and all of this of course pointing to the fact that no-one really knew what to expect.

Another US business owner said it best: “I’m confident there will be a recovery, but it is years down the road”. Wise words indeed.

The World Economic Forum Annual Meeting in Davos has wrapped up and it’s clear that money was uppermost on European governments’ minds – be it the lack of or the need to supply the IMF with more funds to avoid a full scale fiscal subsidence across the Eurozone.

On a positive, the unlimited liquidity provided by the European Central Bank’s three-year long term refinancing operation (LTRO) has reduced pressure on European banks and is widely believed to be helping confidence return.

And it needs to. With the World Economic Forum’s Global Confidence Index indicating confidence in global cooperation has dropped it’s more important than ever that government and business communities work together to deliver this much needed growth.

Lee Howell, Managing Director at the World Economic Forum responsible for the Annual Meeting and the Forum’s Global Risks Report 2012 said: “The latest survey suggests that company leaders and public officials will urgently want to focus in Davos and beyond on job generation and spurring growth.” He added: “Low confidence in governance and high concern about disruption are the making of a slow-burning fuse.”

These are two areas highlighted by the 2011 Sage Business Index. In this report, a significant 78 percent of small businesses polled felt that their governments did not provide sufficient advice and support. At the same time the findings indicated that businesses want to focus on the future with investments plans – a third of which saying they intended to invest in sales and marketing. And while none were planning on reducing the workforce, they were not committing to recruiting.

Meanwhile according to a Bloomberg Global Poll, 48 percent of respondents predicted the U.S. will be among the world’s best-performing markets this year compared with 18 percent who are positive about world growth.

It seems teamwork between industry and governments will hold the key to recovery and it has long had the full support of small businesses worldwide.

The recent visit to the UK by the US president saw Barack Obama and David Cameron declaring the relationship between the UK and the US as “essential…for us and the world”, with Cameron announcing that “there is an incredible alignment of views, understanding and interest between Britain and America.” Read more