Is the economy back on track?
Friday 21st June 2013
It has now been more than half a decade since the Western hemisphere saw economies falling into dire straits. Phrases such as quantative easing, fiscal regulation and credit crunch are now part of our everyday language – where once they were only whispered in financial circles. But after some tentative signs of improvement – is the economy back on track?
The implications of the banking crisis, and the resultant bail outs, have been severe on businesses across the world. In both public and private sectors, job losses have been widespread and services of almost every kind have been adversely affected. But as time has passed, governments and financial institutions across Europe and America have been working hard to put economies back on track – the question is, is it working?
Signs of growth
A recent article in the Daily Mail highlights a number of key figures which suggest good news for the UK economy. Surprising figures from May have altered the projections of growth in the UK economy, bringing the second quarterly growth figure to 0.5%. The British currency has made equal gains on the Euro, seeing highs of €1.1766.
The Daily Mail article recognises a large proportion of this success as being down to the success of the services industry in the UK, which accounts for 75% of the country's economic output. The index of activity held by Markit plots the services sector at 54.9, the highest since last March. This figure details growth, with numbers above 50 denoting growth and those below 50 representing decline.
Likewise, according to Deloitte, Britain’s biggest businesses are preparing to invest billions of pounds in growth-related initiatives this year as optimism in the UK corporate sector returns:
As growth figures in the UK continue to tell a promising story, an increasing number of people are investing in small business too, which is due to benefit from the growth and strengthening of the national and European economies. Indeed, these promising figures represent positive results which stem not only from government initiative, but also from the shrewd handling of many businesses up and down the country.
Businesses are able to take responsibility for their own contingency planning, especially if their business is already struggling.
Phil Smith, Phil Partner at Moorfields Corporate Recovery, a company that specialise in business turnaround and insolvency advice for business, argues that the environment many businesses are operating in this year is extremely tough.
“Continued economic uncertainty means that all businesses need to ensure they act fast to address difficulties they may face. Seeking the advice of recognised restructuring experts sooner rather than later can make all the difference.”
Steps by financial regulators and governments do have a considerable impact on the state of our economy, but businesses themselves are not powerless to dictate how well they fare during tough times. However slow the recovery is across Europe, there are steps which businesses can take to determine their own pace of growth and to secure their successful future.
Editorial Contact Details - Conor Shilling