How do we see the economy in 2013?

Posted 24 October 2012 by Neil Moore

The economic outlook for 2013

More of the same...

I suppose that is the simple answer,  but do you know - I do not feel so bad about that.  I went to a conference in London on Friday and listened to a very clever chap who apparently knows all about these things.   Based on the fact that he was a consultant to all who are important, it would appear that he knows what he was talking about!  Roger Martin-Fagg  gave it to us straight, the audience who waited for words of wisdom with our agenda of hope and improvement were told ‘it is not going to get any better’.

But the reason I do not feel so bad about it is that we have a strong innovative business.   Any small business owner at the moment agrees that it is hard to grow the business and the normal avenues of growth are just not available. Businesses are reducing debt, they are not borrowing which of course is another reason why the flat economy continues, because to have a successful economy we need growth. We cannot have growth unless we print more money (QE) but when we do the banks keep it to improve their balance sheets and do not lend it as they should.   So, we should have a supply of money to sustain 7% growth but in reality it will be no more than 2.6%.  It is worth noting that small businesses revenues make up 64% of the UK businesses (i.e businesses that employ less than 200 people) with a revenue of £1.472 trillion and therefore an awful lot of tax revenue to the government;  but the government, even with cut backs, are over spending by 8% more than they are getting in tax revenue.

So two more years of no growth but why do I feel good about this? The truth is I’m excited.  We have a business that is always thinking of how we can serve our customers better,  we can improve our revenues by delivering a higher value service to our customers,  this will reflect in an increase in our market share and we will achieve growth.   After all a flat economy doesn’t mean people will pay less and expect less, the demand from our customers is even greater than it was five years ago.  They quite rightly expect more and they don’t mind paying for it.  If you go into McDonalds you know what you’re going to get, you will not get more than the burger and chips you expected and you will pay a sensible price for it but if you did not get it consistently with a smile then you would stop going (if you are a customer that goes to this type of establishment in the first place of course, I dare say if you went to an up market restaurant chain or a niche player your feeling would be the same).

You see we are a local business with a desire to offer a local service but with global backing and this comes from the extensive marketing we do on the world wide web.  This will only increase and our attitude towards innovative marketing for our business can only reflect in a positive way for our clients.  This means I am really happy about the outlook for the next few years!  By the way the clever person (Mr Martin-Fagg) said that Europe will be recession for the next 2 years and China will see its economy shrink.  Oil will not reduce in value which it often does in a recession because Russia now controls a huge percentage of natural resources and Mr Putin staying in control has cost them a lot of money.  The same can be said for Kuwait - how much did it cost them to avoid the Arab spring?  By the way Scotland will vote against independence. 

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