Cash Management Top Priority of European, Middle Eastern Execs
The vast majority (95%) of manufacturing executives across Europe and the Middle East say that maintaining a sound balance sheet and improving cash & working capital management are currently top priorities for their business, according to KPMG’s third Business Leaders Survey.
Stephen Cooper, UK head of diversified industrials at KPMG, said: “The global financial crisis has been a wake-up call for many manufacturers. The vast majority have now incorporated a more focused and sustainable approach into their business strategy.
By doing this, they have reduced their reliance on credit. This means if the economic climate worsens they won’t have to resort to one-off impulsive fixes. Clearly, manufacturers have learnt a valuable lesson in cash management which in today’s volatile climate puts them in a better position than many of their counterparts in other industries to focus on growth and contribute to the UK’s growth plans.”
Aside from improving cash and working capital management, the survey finds that the top priorities for manufacturing businesses in Europe & the Middle East are:
Changing business operations to realise cost efficiencies (42%)
Innovation through product development (35%)
Looking for growth in emerging markets (31%)
Exploiting growth opportunities through successful transactions (28%)
Looking ahead, four-fifths (82%) of manufacturing executives agree that they will need to capitalise on ‘megatrends’ such as emerging markets, efficiency of resources or sustainability. They believe that such activities will better equip them to withstand market challenges such as increased regulation, shortages of raw materials and non-traditional competitive threats from new competition in a changing market environment.
Stephen said: “Despite volatile market conditions, the manufacturing sector is growing. We can see that future growth opportunities are very much on manufacturers’ minds and focus on growth through emerging markets is creeping up the agenda.”
In the long run however innovation through product development is expected to be a key driver for the manufacturing sector. At the moment 43% of manufacturing executives believe that a shift towards the commercialisation of current technologies and products over traditional research and development is expected in the near future.
“The government will need to play its role in this movement if the UK’s manufacturing-base is to benefit from the commercialisation of current technologies. Business-friendly intellectual property laws and targeted incentives will be required if the UK is to become a pioneer in technologically innovative products.”