UPS ASIA BUSINESS MONITOR REVEALS INDIAN SMEs MOST OPTIMISTIC FOR ECONOMIC RECOVERY IN 2009
By chennaivision at 19 June, 2009, 11:24 am
Survey Reveals Asian SMEs See Tough Road Ahead
India, June 17, 2009 – UPS today announced the findings of its fifth annual Asia Business Monitor (UPS ABM 2009) survey, a study on the competitiveness of Asia’s small-to-medium enterprises (SME). Despite the impact of the slowdown on their business, SMEs in India are most optimistic of economic recovery and growth this year amongst other countries in the region, according to the survey.
“It is encouraging to see SMEs, who are key contributors to the economy, optimistic even amidst this challenging business environment. Through the findings of the ABM, we hope to draw attention to the role of the government this year. Together with the business community, we can help ease the burden on SMEs by business solutions, while they prepare for the economy to rebound,” said Pirojshaw Sarkari, Managing Director of UPS Jetair Express Pvt. Ltd.
“This year’s UPS ABM survey reveals that SMEs in India have a more positive outlook towards their development and business prospects than their regional counterparts,” said Derek Woodward, President, UPS Asia Pacific region. “While they have been affected by the financial meltdown and are facing a number of obstacles, they are confident of bouncing back.”
“Within the region, SMEs have a tough road ahead. With SMEs making up 95 percent of all businesses in Asia Pacific, their desire to keep their workforce and at the same time, operate competitively is commendable. Their call for help should not go unheeded,” added Woodward.
Optimism in the Midst of Challenges
While Indian SMEs are more optimistic about 2009 than the majority of their counterparts in the Asia Pacific, only 40 percent expect to see any economic growth for India. They are equally optimistic of their own business prospects with 42 percent expecting growth.
As a whole, the trade outlook of Indian SMEs has fallen significantly in tandem with other Asian markets in the survey. However, trade within the Asia Pacific remains the strongest at 48 percent compared with 69 percent last year.
“While external trade has fallen, India’s domestic market continues to grow so the impact of the economy affects businesses differently, depending on where their key markets are,” said Sarkari, “Indian businesses are known to be resilient and resourceful. We expect them to bounce back quickly when the economy recovers.”
This is in line with the ABM 2009 findings that indicate Indian SMEs are expecting growth in 2009. Twenty-nine percent of SMEs expect to increase their work force, and a further 59 percent expect to maintain their workforce at current staffing levels.
Opportunities for Growth
In the survey, SMEs were asked to highlight key industries where growth is expected this year. Thirty-seven percent felt that IT will continue to lead in growth opportunities, followed by Building and Construction (29 percent), Healthcare and Pharmaceuticals (26 percent), Manufacturing (25 percent), and Automotive (22 percent).
In three-to-five years, SMEs expect IT (54 percent), Building and Construction (41 percent) and Manufacturing (28 percent) to be the key economic pillars for India.
Looking beyond the industries, 21 percent of Indian SMEs felt that in order to grow, they need to focus on producing higher value-added products and services (21 percent), exploring new markets (18 percent), optimizing their operations and production (17 percent), strengthening the workforce with good talent (15 percent) and forging new partnerships.
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