Confidence levels over economic performance have increased amongst the business owners when compared to last year, says Grant Thornton International Business Report (IBR).
2011 ranks Botswana 12th on the Optimism/Pessimism scale amongst the other 39 participating countries in the world.
The business sentiment remains positive in spite of the difficult times the country has seen in 2010. The 2011 index proves that the “optimism balance” has increased from 62 percent in 2010 to 66 percent in 2011. This is against a global optimism balance of +23 percent for 2011, compared to +24 percent for 2010.
The survey results show that Business owners in Botswana are positive about increase in turnover from 65 percent (in 2010) to 70 percent in 2011.
Another positive trend is the expected increase in selling price to 56 percent (2011) when compared to 43 percent (2010). Business owners expect an increase of investments in buildings and plant and machinery this year contributing to their optimism factor.
As per the survey results, growth in Research and Development also seems optimistic to 35 percent in 2011 when compared to 24 percent in 2010.
However, they envisage a dip in employment levels from 50 percent in 2010 to 35 percent in 2011.
Jay Ramesh Managing Partner of Grant Thornton in Botswana comments: “The entrepreneurs in Botswana have shown confidence in economic growth in the country for the year ahead. We hope that this transforms into positive business results across all businesses, thereby spreading a feeling of well being. This will turn out to be even better if all the good initiatives of the government to bring about better discipline and increased productivity bear fruit.”
Across Latin America, a balance of +75 percent of privately held business owners are optimistic about their region’s economic performance in 2011.
Elsewhere, optimism in the Asia Pacific region (excluding Japan) is at +50 percent, whilst in North America it is just +26 percent, with Europe the least optimistic region at +22 percent. Japan, the most pessimistic (-71 percent) of all the economies surveyed, maintains its levels of pessimism from 2010 (-72 percent).
The 2011 IBR reveals some big swings in optimism levels in key economies. Businesses in Germany are the most optimistic in the Euro zone at +75 percent ÔÇô an optimism which has
surged over the past year (2010: +38 percent). In addition Finland (+57 percent), Belgium (+45 percent) and the Netherlands (+19 percent) are all experiencing high levels of business confidence going into 2011.
However, going into 2011, confidence is understandably low throughout those Euro zone economies experiencing sovereign debt troubles with Ireland (-45 percent), Spain (-50 percent) and Greece (-44 percent) at the bottom of the global league table.
Ed Nusbaum, CEO of Grant Thornton International said: “With soaring levels of business optimism across the region, driven by the economic growth of Brazil and Argentina, Latin America could be the economic story of the next decade. However, despite a waning of confidence in mainland China it should certainly not be written off. Capital investment across R&D and plant and machinery means that the economic progress of China looks set to continue.”
IBR is a survey of medium to large privately held businesses, researching the opinions of over 5,700 businesses in Q42010, and over 11,000 on an annual basis. The target respondents are chief executive officers, managing directors, chairmen or other senior executives (title dependent on what is most appropriate for the individual country) from 39 economies primarily across five industries: manufacturing (25 per cent), services (25 per cent), retail (15 per cent and construction (ten per cent) with the remaining 25 per cent spread across all industries.
Locally, the sample tends to cover the industries mentioned previously, with some countries being able to have local valid data for specific sectors or regions when the sample size is large enough.