Managing in a downturn – the business theme for 2008/09, says PwC

After seventeen years of steady economic growth, the UK is facing the combination of an economic downturn and a savage slowdown in consumer discretionary spending. 

And, according to business advisors PricewaterhouseCoopers LLP, Northern Ireland is not immune.

In the three months to June of this year, company liquidations increased by 50 per cent on last year, with the number of individual bankruptcies rising by nearly 42 per cent.

And that, says PwC Business Recovery partner Garth Calow, is on the back of 164 corporate liquidations in 2007, which was already the highest for a decade:

“The current situation is difficult. Year-on-year average house prices in Northern Ireland are down 16 per cent, the average family grocery bill is up £800 and new car sales are plummeting.

“There is growing evidence that consumers are already plundering their savings to sustain their current standard of living.

“If this is the case, further cuts in consumers spending may come more swiftly and be far deeper than so far anticipated.

“But it is not just those in the consumer supply-chain who are affected, managing in a downturn is the message on the wall for all of corporate Northern Ireland

PwC says that managing in a downturn may be more difficult than it appears for many of today's executives who have built their careers through 17 years of economic growth. Natural attrition has removed many experienced managers from the corporate scene who understood that when it comes to managing in a downturn, the status quo can not prevail and doing nothing is not an option.

Garth Calow says that with a downturn now a reality, businesses need to take decisive steps to understand the situation and what it means for their future survival:

“Managing the opportunities is every bit as important as managing the threats – and potentially a great deal more profitable.

“PricewaterhouseCoopers’ experience of previous downturns is that companies can emerge stronger and potentially more profitable, while others fail to adapt.

"But the difference between gain and loss in a downturn is about knowing the action to take and taking it.

Times may be tight and banks may be difficult but for 2008 and most of 2009, doing business in a downturn is a day-to-day reality.”

Contact details
Email: John Compton
Tel: +44 (0)28 9024 5454