Final Business Confidence Survey

Business Confidence Survey : 

Business Confidence Survey MPA International January 2009

Introduction : 

Introduction Just as the crisis in the world’s banking industry was taking its toll in Q4 of 2008, MPA carried out an on-line survey to gauge business confidence in the office products industry worldwide. MPA send out questionnaires to over 1,200 manufacturers and distributors of office products. Replies were received from 70 respondents (6%) which is low but enough to provide results that are statistically significant for the sample as a whole. More responses would have enabled us to draw comparisons between regions and segments of the business but as they stand the results provide a good litmus test of current opinion within the business and a benchmark against which future soundings can be compared. The results are surprising when compared with overwhelmingly gloomy sentiments being recorded in the general press and in pronouncements by various economic pundits. Although the majority of respondents felt that the general economic climate was set to deteriorate and that the prospects for the office products business were far from healthy, when looking at the performance prospects for their own businesses the majority were far more optimistic, suggesting a high level confidence in their ability to ride out the storm. Nor, as might have been expected, were problems gaining credit over the next 6 to 12 months rated as a key concern. Respondents were more worried about cost pressures, pressure from competitors and price pressure from customers, which would result in a classic squeeze on profitability. This survey is the first of a regular barometer of business confidence in the office products business that MPA intends to carry out. While the results should be interesting in their own right they will also be used as an input to MPA’s short term forecasting model that will be available to clients.

Respondent Profile : 

Respondent Profile Main Area of Business 80% of respondents described their business as general office products and 20% cut office paper, electronic office supplies, and office furniture suppliers Main Business Activity 42 respondents described themselves as distributors, 36 as manufacturers, and the remainder felt they fitted in both categories Job Function 47% of respondents were in general management, 43% in sales and marketing, 3% purchasing and 7% other Region 75% of respondents mentioned Western Europe as their main area of business, 11% North America. The remainder were based in Eastern Europe, Asia and South America Employment 49% of respondents were employed in businesses employing more than 250 people, 23% in the bracket 50-249 employees, 20% in the bracket 10-49 employees , while only 9% employed less than 10 people

Question: How do you expect the national economy to perform over the next 6 months? : 

Question: How do you expect the national economy to perform over the next 6 months? Most respondents were moderately pessimistic about economic conditions in their countries over the next six months.

Question: How do you rate current conditions in the Office Products business vs 6 months ago? : 

Question: How do you rate current conditions in the Office Products business vs 6 months ago? Respondents’ pessimism about the future of the economy appears to have been supported by past experience in the office products business.

Question: How do you expect conditions in the Office Products business to perform over the next 6 months? : 

Question: How do you expect conditions in the Office Products business to perform over the next 6 months? Looking forward to the next six months the pattern of expectations for the office products business is very similar to the last six months, though there is a small increase in the proportion that expect an improvement.

Question: In your business/organization do you expect an increase, decrease or no change over the next 6 months for the following areas? : 

Despite their overall pessimism, respondents were generally more positive about the prospects for their own companies. The majority saw no change or an improvement on all of their key performance indicators. Question: In your business/organization do you expect an increase, decrease or no change over the next 6 months for the following areas? % Response (highest)

Question: Did activity levels for the last 6 months exceed, fall below or meet your expectations in the following areas? : 

The reason for moderate optimism about the future seems to be that in the last six months the majority of respondents had either met or exceeded their expectations for all key indicators, even profitability (just). Question: Did activity levels for the last 6 months exceed, fall below or meet your expectations in the following areas? % Response (highest)

Question: Looking at the last quarter are the orders you have received from customers larger, the same or smaller than the previous quarter? : 

Question: Looking at the last quarter are the orders you have received from customers larger, the same or smaller than the previous quarter? As only half the respondents saw a reduction in order sizes it is not surprising that a majority met or exceeded their performance expectations.

Question: Looking forward to the next quarter are you more or less confident about the performance of your business? : 

Question: Looking forward to the next quarter are you more or less confident about the performance of your business? Looking forward the majority of respondents are either more confident or see no change. Under half are less confident.

Question: Can you rate the importance of the key challenges facing the Office Products industry over the next 6-12 months?(7 point scale: 1=not important at all, 4 = important, 7 = extremely important) : 

Question: Can you rate the importance of the key challenges facing the Office Products industry over the next 6-12 months?(7 point scale: 1=not important at all, 4 = important, 7 = extremely important) % Response (highest) Cost pressures, price pressures and aggressive competition are more serious concerns to respondents than the failure to obtain credit. However it is clear that their greatest concern is uncertainty about the future performance of the economy.