Midland firms focus on survival as downturn bites

Mar 31 2009 by Tom Scotney, Birmingham Post

Survival is the main priority for businesses in the West Midlands at the moment, according to the Institute of Chartered Accountants in England and Wales.

David Furst, president of the ICAEW, said that the economic crisis was one of the most challenging the country had ever faced. ICAEW research showed that the West Midlands region showed the lowest business confidence in the whole UK.

“Clearly businesses in the West Midlands don’t believe this will be a short recession,” he said. “There has been a record reduction in capital investment and weakening customer demand. Access to capital is a challenge to businesses in this region and late payment is becoming an increasingly commonplace problem.

“In order to continue to survive, businesses should think carefully about any major decisions they make to save costs. They must manage risk and uncertainty, value employees and review structure and cost base.

“As the urgency of resolving the current problems passes, there will be a need to look at the underlying causes and ensure the lessons are learnt. It is critical that governments and regulators avoid taking steps which have a detrimental impact on competitiveness and cause more problems in the future.

“In our representations on the forthcoming Budget we have stressed that the Government should not put unnecessary burdens and costs on business through taxation policy during the economic downturn.”

Andeep Mangal, the president of the regional branch of the ICAEW, said: “The focus must be on ensuring businesses survive in the short to medium term. There will be tough decisions to be taken but there are also opportunities. We will see great innovation, creativity, new and more resilient business models emerge.

We have the advantage of a tremendously diverse economy in the in the West Midlands and perhaps more importantly we have a close, tight knit, supportive business and professional community.”