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Author: Steve Riley Date: 01 Nov 2009 Downturn — are you still suffering?A roundup of a few of the interesting facts and stories that have crossed our radar in recent weeks. The BBC recently reported that the UK is still officially in recession. The most recent set of results was slightly against the grain of expectations – France and Germany came out of recession 6 months ago and the UK was expected to follow suit for the latest quarter. Instead the economy as a whole fell a further 0.4% between July and September. It has now contracted 5.9% from its peak before the recession began. The US economy grew at an annual pace of 3.5% between July and September, its first expansion in more than a year, official data has shown. Good news for our sister company, based in Canada and the US. Whilst there has been much talk of green shoots and lights at the ends of tunnels, whether or not you or your business are personally suffering the effects of the downturn is very much an individual thing. Whilst many are in the doldrums or worse, some companies in even the hardest hit sectors are capitalising on their competitors’ woes and doing comparatively well. A small number are actually experiencing boom times. We know from our own experience that the number of appointments is the highest we’ve seen for some time. This is an early measure of interest, a long way from invoice-able orders and actual turnover, but still very encouraging. Merchant doldrumsCloser to home in the merchant sector Wolseley have posted a huge £766M loss, admittedly mostly explained by restructuring costs and write downs. At Travis Perkins revenue fell 13 per cent to £1.454 bn year-on-year and pre-tax profit plummeted 27.4 per cent to £90.4m. This news was greeted by a rise in share price, the markets relieved that things weren’t worse in the current market. In the second tranche of suppliers, those in the top tier but outside the mega-corporations, many merchants are showing considerable agility dealing with the difficult trading conditions. Elliott Brothers has opened a new Romsey branch, in their Hampshire heartland. The new premises opened in early October and doubled the size of their previous branch. Elliott, a 170-user bisTrack site, use the software to closely monitor and control the business across their 10 branch network. Pontrilas Timber and Builders Merchants, a £26M company in Herefordshire has ambitious expansion plans, supported by their new bank Lloyds TSB with total banking facilities of £8.3M. It’s not often you hear a company openly praising their bankers, but Pontrilas and Lloyds TSB are busy building bonds for the future: ‘We spend time with the directors of the business and get to know it, and understand what their aspirations are for the business’, said Lloyds TSB’s Andy Connors. [Update: Pontrilas and Lloyds story in the TTJ] Over in South Yorkshire Arnold Laver Timber World are exploiting bisTrack Smart Views to do more than ever with the valuable data buried within their IT. John Worsnop, Laver's group auditor, says it takes less than half the time to complete monthly system audits using smart views: "Previously I had to export information into Excel, filter it, and end up with a list of numbers which had to be copied and pasted back into the system," he said. "Using a smart view I can now see the information I need after just one click. "I use around 20 smart views regularly for high and low margin reports, negative stock items, products without a cost, and so on. A further benefit is that the information you are seeing in the smart view is live." bisTrack's intelligence toolkit measures the KPIs important to a company, with a live rolling snapshot of data within the system. The Unimer clearing house reported a tough year, with the volume of transactions down but an increase in their market share. In the year to 2009 they processed £793M worth of invoices (down 13.6% on the previous year). One significant bonus for members is the guaranteed payments, given the fragile credit insurance situation. The construction sectorGlenigan reports that high vacancies and continuing downward pressure on rentals has led to continued problems in the commercial sector (down 43% year on year). The beacons of hope in construction are education, driven by the 'Building Schools for the Future' initiative, up 3%; Amenity and Community, up 8%; and Social Housing, up 1%. They give a continuing weak forecast, with ongoing reliance on the public and social sector. The CPA (Construction Products Association) is downbeat foreseeing a delayed recovery in 2011, with the return to 2007 activity levels taking as long as 10 years. Back on the nation’s favourite dinner party topic of house prices, they continue to rise gradually – the Land Registry gave a 0.9% in September 2009. According to recent figures from HM Revenue & Customs, sales rose to 82,000 in September, double the number sold in January. "Lending activity has recovered in recent months, when compared to the start of the year, as buyers and sellers tentatively return to the market," said Adrian Coles, of the Building Societies Association (BSA). "However, lending is still at levels much below that of previous years, and the slight recovery remains fragile," he warned. On the high streetWhilst many consumers have concentrated on paying down debt, with lower mortgage repayments leaving some with some disposable earnings, there are come signs of optimism on the high street. The latest GfK NOP poll reports that UK consumer confidence rose to the highest in 21 months in October as Britons said they are more likely to make big purchases. The report shows “a steady, if cautious, uplift in British confidence in our economic situation,” said Rachel Joy, an analyst at GfK. “Consumers are still wary of the future and so the overall trend towards uplift is still fragile.” Overall then, a mix of good news and bad news. Where you fall on the spectrum seems to depend very much on individual circumstances and how well-prepared you are for the upturn when it comes.
Linkshttp://news.bbc.co.uk/1/hi/business/8331271.stm
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