International Business Report 2009

Focus on:  Australia

Businesses in Australia expect to suffer as much as other Asia-Pacific businesses in terms of falling consumer demand whilst employment growth is expected to decline sharply. However, Australia has been surprisingly resilient until now and it is not expected to go into recession in the remainder of 2009.

IBR 2009

The Grant Thornton International Business Report (IBR) 2009 examines the thoughts and opinions of 7,200 leaders of privately held businesses from 36 economies. This year's research, the 17th time that Grant Thornton has gathered this data, coincided with an almost unprecedented level of global economic turbulence; a combination of a severe banking crisis in many mature economies, the squeezing of credit lines, colossal house price corrections and a widespread collapse in fixed investment.

Focus on: construction and real estate

The global construction and real estate sector has encountered tough conditions over the past year. A weakening housing market hit residential building hard in most economies and financial constraints depressed new building projects in the industrial and commercial sectors. Many governments have attempted to shore up demand with public sector investment programs.

Focus on: financial services

The upheaval in global markets has created a climate of great uncertainty for the financial services sector. Many large banks in mature economies are burdened with toxic debts and have suffered huge losses. However, some PHBs included in the IBR survey appear to have avoided the worst of the fall-out, with some even using the situation to their advantage.

Focus on: hospitality

Steadily rising global affluence, the upsurge in cheap travel and the development of middle class tourism in populous economies such as mainland China and India provided a strong impetus to the international tourist industry in recent years. But the onset of the global recession saw the start of a much more difficult era for the sector. Businesses are having to adjust their strategies dramatically just to survive.

Focus on: retail

The economy turned sharply against retail over the past year. Credit availability, which fuelled the boom of recent years, dried up. High inflation in food and energy eroded spending power and disposable incomes were hit by rising unemployment. The hardest-hit sectors are those vulnerable to the housing market slump, such as furniture and electrical, and discretionary items – fashion and luxury goods.

Focus on: technology

The key driver of growth in the technology sector is business investment, which is fuelled by firms’ desire to upgrade and invest in plant and machinery. However many businesses worldwide have cut spending on technology in the current climate, and have postponed updating systems until the outlook brightens. As a consequence the technology industry has suffered.

Business planning: navigating the global downturn

The global downturn has dramatically affected privately held businesses (PHBs) around the world. Such businesses, including entrepreneurs, family businesses and non-listed entities are considered the lifeblood of the global economy.

This report examines the strategies that PHBs can use to make ‘big decisions’ to help survive the economic downturn in the longer term with the aid of good business planning. Innovation, cost cutting and pricing strategies emerge as the three most successful initiatives for boosting profitability. Each strategy is examined with practical advice provided for successful planning in such uncertain times.

Mergers and acquisitions: looking beyond the global downturn

Today’s headlines may be dominated by the global economic downturn, but when privately held businesses (PHBs) are asked about their plans for the next three years, a more balanced picture emerges. While the current tightening of lending policy and uncertain economic outlook is clearly impacting transaction volumes at the moment, the results suggest that PHBs retain a surprisingly robust attitude to deals over the next three years.