Businesses still investing despite downturn

Companies in the region are not waiting to invest. Instead they are using the downturn as an opportunity to create competitive advantage, according to assurance specialists at PricewaterhouseCoopers LLP.

The firm is reporting an increase in approaches from local companies that are keen to turn the downturn to their advantage. These focus on looking for opportunities to invest, rather than solely cost reduction and management.

Paul Norbury, assurance director at PricewaterhouseCoopers LLP said:

“Companies in the region are aware that leaner and stronger businesses will come out of the downturn in better shape than their counterparts. While cost management measures are important to improve liquidity, a surprising number of businesses are also planning to make investments. These are designed specifically to deliver efficiencies or strengthen their market share.”

“However, planning to make such investments in the current economic climate requires aforethought, particularly as lenders will need convincing that investment strategies are well-considered.”

The first step for many businesses is clearing the way for investment by looking for opportunities to turn unwanted or under-used assets into cash. In some cases this is as simple as selling off unwanted stock or reducing overheads by consolidating property portfolios. Such changes are largely aimed at reducing costs but are also being seen as a way of gaining a competitive advantage once their marketplace starts to recover.

Paul Norbury said:

“Businesses in the region are showing they are ready and willing to take advantage of investment opportunities that strategic business reviews often throw up. The types of investment being considered range from purchasing new plant or equipment to create efficiencies, to the acquisition of bargain basement businesses that will strengthen market share. Importantly, some companies are also exploring ways to strengthen their workforce by increasing rather than decreasing their in-take of skilled workers.”

“Pressing ahead with such investments in people, plant and strategic developments shows real drive and courage. If the region’s businesses continue in this way, the local economy will succeed in turning the downturn to its advantage.”

Contact details
Email: Paul Norbury
Tel: +44 (0)1908 353051