MEDIA RELEASE PR41047
Global Businesses Favour Investment Over Cost Cutting to Aid Recovery
LONDON, Sept. 2/ PRNewswire-AsiaNet/
- The boom in economic confidence in China continues, with 83% of senior executives more confident now than at
the beginning of the year, compared to just 29% in the USA.
- One in three (34%) businesses across the globe has made redundancies in the last twelve months, but the
appetite for cost-cutting measures is declining.
- Businesses are looking to invest more in the next twelve months, with one in four senior executives (29%)
committed to increasing staff numbers.
One in four senior executives across the globe is less confident now than at the beginning of the year, according
to an international study of economic recovery published today Thursday 2nd September. However, the mood
varies greatly from country to country. Pessimism is most pronounced in the USA, where confidence levels have
dropped since the beginning of the year, while optimism in the East continues to soar.
The research, conducted by international law firm Eversheds, reveals that businesses in the USA have buried
their heads in the sand, taking the least proactive approach to combating the challenging economic climate.
Conversely, businesses in China and Russia have led the charge in trying to drive demand, by searching for new
market opportunities.
China is also leading the way in international expansion, with almost three quarters of those surveyed looking to
expand into at least two foreign markets in the next 12 months, while just 18% of companies in the USA are
seeking out international opportunities.
Eversheds' Tools for Recovery report, which captures the views of more than 1000 senior business figures
across China, the USA, Europe and the United Arab Emirates (UAE), also reveals signs of a revival in global
mergers and acquisitions activity. One in five businesses (22%) said they would be on the acquisition trail in the
year ahead, up from 13% in the last 18 months.
Again, Russia is leading the way with 42% of businesses looking at acquisitions in the next 12 months.
Looking ahead, the research shows that businesses will continue to drive demand and will also have a stronger
appetite to invest in three key areas - staffing levels, marketing activity and research and development projects.
This follows some tough decisions during the last 18 months, with 46% of businesses cutting discretionary
spending, 38% freezing or reducing pay and 34% making redundancies. Job losses during this period have been
most prolific in the USA, France and the UAE.
Stephen Sorrell, partner at Eversheds, said:
"While economists have signalled the official ending of the recession, there is little doubt that challenging
economic conditions persist. Despite the downturn of the last few years, the majority of companies have survived
and some have even thrived. The question is how? Through this research, we wanted to identify the steps that
businesses across the globe have taken to stay ahead and the plans they have in place to recover and grow.
"The findings show a very mixed picture in terms of confidence levels and the way in which businesses have
tackled the challenging economic climate.
The apparent inertia in the USA is quite surprising, while there are encouraging signs of a general trend towards
reducing cost-cutting measures in the year ahead and a greater desire to invest and focus on growth.
"Our research also noted some differences across the sectors. It's really encouraging to see that the
manufacturing industry is among the most optimistic, while the construction sector, which was arguably the hardest
hit by the global recession, has a healthy level of optimism in line with the global average - perhaps a sign that they
have turned the corner."
Notes to editors
About Eversheds
Eversheds LLP and its world wide offices have over 3,500 legal and business advisers providing services to the
private and public sector business and finance community. Access to all these services is provided through 44
international offices in 26 jurisdictions. Eversheds combines local market knowledge and access with the
specialisms, resources and international capability of one of the world's largest law firms.
Lucy Sulkin
For Eversheds International
International Dial : +44-(0)207-919-0683
E-mail: lucysulkin@eversheds.com
Source: Eversheds LLP
NEWS 
