Key Findings - Summary
61% of businesses experienced an increased business turnover in the 12 months to 31st December 2008 in comparison to 2007. 15% of businesses indicated that turnover was on par to the previous year, whilst almost a quarter of businesses experienced a decrease in turnover. Two fifths of businesses experienced turnover up by over 5%, whilst a fifth were down by over 5%.
Projected turnover results for 2009 show a very even spread of results. Almost a quarter of respondents indicated turnover would remain the same, 36% considered that their turnover would increase whilst 41% were projecting turnover would decrease. Projected business turnover for 2009 is at its lowest level in comparison with the previous three years.
17% of businesses are more confident about business turnover projections in comparison to this time last year while just over a quarter have a similar confidence level. 56% are less confident about 2009 turnover projections in comparison to 2008. Confidence in business turnover projections has steadily reduced during the last three years.
Over half of all businesses questioned were more profitable in 2008 than in the previous year, with a third greater than 5% more profitable. A quarter of businesses were more than 5% less profitable in 2008 than 2007. However, 2007 appears to have been an extremely profitable year for most businesses in comparison to preceding years.
45% of businesses forecast that profitability would be down for 2009, one fifth indicated that it would remain the same, whilst 34% stated that it would increase as compared to 2008.
59% of businesses indicated that they had less confidence in business profitability projections for 2009 in comparison to the same time last year for 2008. As with projected turnover, confidence in business profitability projections for the year ahead has fallen for three successive years.
Almost 50% of businesses maintained the same staff levels in 2008 as in the previous year. 30% increased staff numbers, while 21% saw reductions in staff numbers. Of those businesses that saw growth in staff numbers, 16% experienced increases of more than 5% whilst only 9% decreased by the same percentage. The 2008 profile of growth/decline in staff numbers is similar to previously recorded years
Half of businesses are forecasting that staff numbers would remain the same in 2009 as compared to 2008. 17% indicated that numbers would increase, whilst 34% stated that staffing numbers would reduce.
Factors Adversely Influencing Business Prospects
The results indicated the most important factors under control of the States of Guernsey which affect the confidence in business prospects are housing, regulation, capital projects, and taxation.
The results from previous years indicate that taxation had decreased as a main concern for business confidence for the future, with factors such as housing control, capital projects, regulation and EU/international negotiations becoming increasingly important.
The most important factor impacting upon business confidence not under control of the States of Guernsey was the global economy, listed by 50% of the business respondents. Other key concerns were competition (11%) and the UK Government (8%). As one could expect, the global economy is by far the most important factor impacting on business confidence. Exchange rates feature as a concern. Concerns over competition, EU, and inflation have all fallen.
Results show that businesses are more likely to cut back in 2009 on capital expenditure on buildings and fittings, staff training facilities and technology expenditure as compared to 2008.
Training facilities are the area that will experience the least reduction in capital expenditure. In addition, 58% of businesses said that they would be spending the same amount on staff training and development in 2009 as in 2008. A quarter are planning to spend more on staff training whilst 16% are aiming to spend less on training expenditure.
In 2009, a third of businesses project that business costs will go up between 0-5%, with a further 22% of businesses indicating that such costs will go up by more than 5%. A quarter of businesses will maintain the same costs as last year, and 21% will see a reduction in business costs in comparison to 2008.More businesses are maintaining the same business costs as last year or reducing costs in comparison to the previous recorded years.
Almost 40% of businesses increased prices/fees in 2008 by 5 to 10% in comparison to 2007, a fifth increased prices/fees by up to 5%. 4% increased prices/fees by more than 10%. A third kept prices/fees the same as the previous year, and 3% reduced prices/fees.
More businesses increased fees/prices in 2008 by more than 5% than in the previous years.
51% of businesses have indicated that prices/fees for 2009 will be increased. Almost 40% are keeping prices the same as the previous year, and a further 10% are reducing prices/fees.
Salaries and Wages
The total wages/salary costs increased by up to 5% for almost a quarter of businesses in 2008 (compared with 2007). However, 47% of businesses experienced total wages/salary costs increasing by between 5 and 10%, with 14% of businesses seeing an increase of more than 10%.The wages increase in 2008 was highest in comparison to preceding years, impacted upon as many wages and salary are linked to the RPI – which was on average greater than 5%. This pattern of linkage to the RPI can be seen in the preceding years featured.
42% of businesses indicated that the percentage average pay/salary increase for the calendar 2008 compared to 2007 was up to 5%. 44% of businesses stated that average pay/salaries had increased by between 5% and 10%.
The likely increase for total wages/salary costs for 2009 was up to 5% for almost a third of businesses. 22% of businesses stated that costs would increase by between 5% to 10%, with a further 6% of businesses projecting costs to increase by over 10%.
Paper and cardboard recycling are in place in almost three quarters of all business respondents. Metal recycling is carried out by 37% of businesses. Energy conservation measures are in place in 40% of businesses. 15% of businesses had no environmental policies in place. Other items recycled include: toner cartridges, glass and plastic bottles, milk cartons biological waste/compost and batteries.
Approximately 60% of businesses were aware of the “Green Awards for Business” initiative by the States of Guernsey Environment Department. A quarter of businesses were not very aware whilst 17% of businesses had no awareness at all.
Two thirds of businesses do not believe the UK (and Guernsey) should join the Euro. One fifth of respondents were in favour the UK and Guernsey joining. These results are very much on a par with the findings from previous years.
Given the current economic climate, almost 60% of businesses thought that there was a need for a review of the Island’s new fiscal strategy. Only 15% indicated that it should not be reviewed while 22% were unsure whether a review should take place.
States’ Awareness of Local Business Needs
Only 9% of businesses considered that the newly elected States were more aware than the previous States of the needs of local business. 38% were of the view that the current States were less aware.
A quarter thought that is was too early to judge while 28% felt that they were as well informed as the previous States.
57% of businesses considered that the retirement age should be increased. Almost a quarter indicated that it should be raised by two years to 67 years and 15% felt it should be raised to 70. However, 43% of businesses thought that the retirement age should remain at 65 years.
More than three quarters of businesses thought that the local Housing Law should be reviewed urgently (24%) or very urgently indeed (52%).
Over three quarters of businesses are less confident about the prospects for the island’s economy over the next year in comparison to 12 months ago with a quarter far less confident. A fifth of businesses have about the same confidence level as last year, and only 4% are more confident about prospects. 2009 confidence levels are at their lowest levels in comparison to the previous three years.
50% of businesses were not very confident about the medium term (two to three years) economic prospects for the island. However, 40% were confident about the medium term future.
Almost 48% of businesses that responded as not being confident listed the current economy, state of business and the recession as reasons for a lack of confidence. 30% indicated the influence of the States and Government expenditure. Employment was listed by 10%, tax and Zero 10 by 7% and housing and tourism both by 2%.
A total of 100 island businesses took part in the 2009 Chamber of Commerce Business Survey.
For full details of the survey please follow the link http://www.ybg.gg/news_.htm