What do managers think of it so far?
The latest issue of the Chartered Managers’ Institute’s Economic Outlook must make pretty grim reading for the government. Based on over 600 responses from their members, it shows that , in the words of Christopher Kinsella, the CMI’s Chief Executive, managers:
clearly perceive the British economy to be on the verge of a double-dip recession. The immediate outlook appears very bleak with unemployment rising, spending decreasing, continued lack of access to finance, and growth forecasts diminishing into the spectre of another recession.
Managers’ expectations for the longer-term are rather more hopeful, but there is clearly “a growing sense of impatience” with the government. Here’s some of the key points I noticed:
- 84% of managers say the state of the economy is having a negative impact on their business.
- 68% think a double-dip recession is likely. (This is interesting – economists in unions and other progressive organisations are cautious about predicting this, in part because we know we’ll be accused of being anti-British and of talking down the economy. Plainly managers feel less constrained.)
- Majorities expect less investment in recruitment, plant and machinery, R&D and IT. The only areas where a majority of managers expect investement to grow are marketing and business development/sales.
- 70% of managers say employee morale has got worse.
- It’s no surprise that 74% of public sector managers reported a recruitment freeze, but so too did 40% in the private and not-for-profit sectors.
Managers’ list of the policies they’d like the government to implement is quite varied:
Net support Sept 2011
|Taxes should be simplified to encourage growth||
|Govt should provide tax breaks for employer investment in skills development||
|Govt should strengthen measures to improve bank lending to businesses as a matter of urgency||
|Govt funding for Apprenticeships should be increased||
|Regulation of the financial sector should be tightened||
|The new Enterprise Zones should do more to encourage investment in skills||
|Employers & learners should be given greater control over funding for skills development||
|Measures to reduce business regulation should be accelerated||
|Interest rates should be held at current levels||
|Business taxes should be cut||
|Govt should direct investment towards green infrastructure||
|Visa rules for foreign students should be tightened||
|NI holidays would encourage companies to recruit young people||
|Govt should restrict international labour movements||
|Import controls should be used to protect the UK from foreign competition||
|Public spending should be cut further||
|Interest rates should be raised||
|Govt can do little to affect the circumstances of my organisation||
Some of these are hard to read – when managers say they want less “business regulation” do they mean anything about unfair dismissal rules? It isn’t particularly clear.
One thing is very clear – three quarters of managers say that the financial sector should be more tightly regulated. This is not surprising when you consider that a majority in every sector say that the availability of finance has got worse; overall, 95% say it has either got worse or stayed the same in the past 6 months.
The survey does find that the numbers saying the proportion saying the government is cutting too quickly has fallen from nearly half six months ago to 36% now. But then look at that remarkable figure for the numbers saying that what we need is more public spending cuts – a net balance of minus 43%!
It has been clear for most of this year that the terrible collapse of consumer confidence has been feeding through to business managers. This survey confirms just how gloomy their outlook has become. One of the surprising things is the disconnect between the beliefs uncovered here and the pronouncements of those who imagine they represent them in politics and the media.