The UK’s economy remains on track, with figures this week revealing the highest rate of annual growth since the end of 2007, and The Treasury reporting that the economy is bigger than its pre-recession peak. Add to this the UK outperforming the rest of the G7 states for the year running to the end of June, and you’d be forgiven for thinking we’re out of the woods.
Despite this upbeat sentiment, for some, questions about the balance of recovery remain, and all eyes will be on sustained growth as we look to build on progress to date.
Here, I discuss whether this renewed optimism is an important future indicator of even better things to come.
Marketing: the catalyst to performance
As customer and insight champions, experts in proposition development and drivers of competitor advantage, marketers play an instrumental role in shaping an organisation’s future performance. Therefore the attitude, sentiment and outlook of our community are crucial as all eyes remain on this post-recession peak.
That’s why, in 2012, we launched our Marketing Confidence Monitor in partnership with Bloomberg Media and conducted by YouGov. This is a business barometer which tracks the attitudes, sentiment and outlook of marketing professionals across the country. It is the largest and most representative study of its kind drawing input from a diverse range of industries, sizes of company and levels of seniority. We explore key issues relating to business performance, budgets and investment, careers and development the macro-economy and growth.
Our next wave of results will be published in October, and ahead of that launch, we take a look at some of the emerging trends of the last two years as the UK continues to ride the crest of a recovery wave.
Going for growth – the year in view
Rewind a year and confidence was at a 12-month high, with businesses reportedly five times as confident as they were the year before in October 2012 when our Index was launched. Despite this widespread optimism about UK economic conditions and prospects during this time, we saw a real reluctance and low appetite for investment in risk and innovation amongst both large and micro-businesses.
Entry into new markets and categories was the lowest priority for businesses, suggesting that their focus was to remain on targeting organic growth within their existing customer bases. However, this was underpinned by a quarter of businesses reporting lack of sufficient support when it came to export trade and wider growth strategies for realising their potential abroad; something that remains a concern as UK exports recently fell for a third consecutive month.
One consistent trend during the two years of our Index is the high-levels of confidence among SMEs and their prospects for growth versus their larger counterparts.
More positively, fifty per cent of our respondents stated that aggressive growth would be on their management agenda. Also encouraging was an increased focus on sustainable growth, and increased recognition of the rise in consumer demand for ethical, sustainable and socially responsible business practices. This would suggest that businesses increasingly want to ‘do better’ by ‘doing better’; with just under 80 per cent of marketers reporting that they were adapting their business policies and practices to become more responsible. As we embarked into 2014, almost half of businesses reported financial performance exceeding that of their expectations during the previous 12 months.
Where are we now
Despite an optimistic first half of the year challenges still exist and the current upbeat outlook shouldn’t mean a return to pre-recession ways of doing business. The latest business confidence monitor from the ICAEW and Grant Thornton revealed a dip in business confidence, in part, due to a modest decline in growth during Q3 and the Bank of England’s warning that the UK’s recovery needs a broader footing to achieve growth targets.
The impact of skills gaps is also continuing to dent business confidence as it remains hard for some industries, namely manufacturing, to find the right staff to fulfil their requirements. On a macro-economic level, we are seeing that consumers are continuing to spend cautiously, wage growth remains sluggish and there is a real concern that living and travel costs will continue to rise; a heavy burden considering the high levels of personal debt in the UK.
Good things come in small packages
One consistent trend during the two years of our Index is the high-levels of confidence among SMEs and their prospects for growth versus their larger counterparts. This is perhaps largely due to the fact that smaller businesses are able to be much more agile and respond to the changing business landscape quickly.
It is estimated that SMEs could inject a possible £20 billion in to the economy by 2020, and encouraging and supporting high-growth among SMEs has been at the heart of the coalition government’s agenda since the May 2010 election. Indeed, CIM are one of the delivery partners of the Growth Vouchers Programme launched by government this year, providing marketing advice and support designed to fuel SME growth. Many would argue that the government’s austerity programme is still in its infancy, and that the UK’s medium-term economic future remains unclear.
We await the latest findings of our Index with interest.
Be a part of the story
Our biannual Marketing Confidence Monitor Wave 7 is now open and we would like to invite marketers to take part. The survey takes on average 7-10 minutes to complete and is 100% confidential. All participants will receive the full findings report at no cost (value £50) in October 2014. Visit Marketing Confidence Monitor Wave 7 to participate in the study and be a part of the story. The survey will close on 31 August 2014 so now is the time to take part. Further information about the Marketing Confidence Monitor can be found at http://www.marketing-confidence.com/.
For further information about The Chartered Institute of Marketing (CIM), visit www.cim.co.uk.
