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Tuesday, May 4, 2010

India sees revenues rising but slowdown in pace of growth: survey

Global economic growth is progressing steadily, but full recovery will not be reliably under way until December 2010, according to the latest edition of the bi-annual Regus BusinessTracker survey. The survey’s 15,000 respondents reported a higher percentage of businesses seeing revenue and profit growth than were experiencing decline.However, respondents, who were asked “When do you expect economic recovery and growth to be advancing strongly and reliably in your country"? have now shifted their expectation of the full momentum of economic recovery back five months, from July to December. In India specifically, net growth companies are positive at 54 per cent, but optimistic recovery expectations have shifted a little from March 2010 to July 2010.

The key findings of this worldwide survey emphasise that the business community needs to retain an element of caution in their optimism. The study revealed net growth, with 12 per cent more firms reporting a rise in revenues rather than a decline, and 8 per cent more companies experiencing an increase in profits rather than a reduction. However, businesses across the globe need to stay focused on strategies for cost management, streamlining and greater operating flexibility.The second edition of the Regus BusinessTracker international economic indicator survey was conducted in over 75 countries and canvassed over 15,000 respondents about the financial performance of their companies and their expectations for growth.

The survey also analyzed the effects of company size on economic expectations and stimuli. In India 83% of companies expect a rise in revenues in the coming year (70% globally). 74% of large sized businesses compared to the 42% global average had experienced a rise in revenues, as a result 20% more large businesses than the global average (70%) expect the rising revenue trend to continue in the coming year. Small businesses When asked about the measures they believed would be most effective in aiding the recovery, 40% of medium businesses (globally 19%) advocated a rise in interest rates to curb inflation while 39% more medium sized businesses than average (37%) pressed the need for public investment in infrastructure. All size businesses in India find consensus on this measure supported by 59% of companies nationally.

The survey also analyzed sector differences, finding that in this particularly bullish country, 34% more consultancy businesses than average had experienced a rise in revenues (globally 42%). On these positive results it is not surprising that 63% of consultancy businesses (globally 14%) expect the full momentum of recovery to take place in the first half of 2010. In the paste year 71% of companies in the financial services industry and 76% of ICT companies recorded a rise in revenues.

Mark Dixon, Chief Executive of workspace solutions provider Regus, comments: “Despite the slippage between expectations and real experience of business growth observed in this latest survey, it is important to emphasize that the experience of growth is overall still positive around the globe. Fiscal and monetary easing and fiscal stimulus on the cards have maintained Indian growth, however, inflation pressures are becoming more troublesome particularly to medium businesses as our results suggest.

“An important caveat remains, however; commentators everywhere agree that businesses must take some important lessons away from the downturn. In particular the restructuring of workforces and workplaces should become a continuing process as the flexible working practices which helped weather the recession have yielded a number of positives for employers and employees alike. Anecdotal evidence gathered by Regus from its operations globally indicated that the shift from traditional commercial property leasing to solutions that accommodate more flexible working systems is certainly underway and likely to play a large part in the coming recovery.”

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