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Third Sage Business Index - Press release

Third Sage Business Index shows continued concerns over global economy and growth but improving confidence in some local markets and more positive business outlook

10,000 SMB survey shows rate of decline in global economic confidence has slowed but worries around inflation and fuel costs remain

29th March 2012, Newcastle: Today, The Sage Group PLC, released the results of its third Sage Business Index – International Business Insights. Polling over 10,000 businesses across Europe, North America, Africa and Asia, the Index shows that while confidence in the global economic outlook continues to decline, the outlook for local market conditions and businesses is improving.

While confidence in their own business’s prospects (business outlook) has improved as a whole against the last Index, there has been a slight drop in the rate of growth, with 67 percent of businesses experiencing either neutral or positive growth, a drop of two percent on September 2011. This can perhaps be explained by their concerns around the rising costs of fuel and raw materials which is the number one challenge to growth. However, the improvement in both local economic confidence and business outlook suggests a more optimistic mood exists within individual companies.

Economic Confidence – global pessimism, local optimism

The good news is that the steep decline in confidence between the first two surveys has been arrested. Although there has been a .52 drop in the Index score for global economic confidence, this is much lower than the 7.7 reduction witnessed between the March 2011 and September 2011 surveys. This suggests that the overall trend of stability and growing confidence in local economies and individual company performance is likely to continue.

Guy Berruyer, Chief Executive of The Sage Group said: “Yet again we are seeing uncertainty at a macro level tempered with some optimism at a micro level. This suggests companies are extremely focused on the day-to-day challenge of simply staying in business. These generally positive figures around business confidence indicate that the green shoots of recovery are definitely here. Governments in each market should do all they can to harness and help the entrepreneurial spirit that already exists.”

Index Scores March 2012 September 2011
Global economic confidence 43.95 44.47
Country economic confidence 47.26 47.11
Business outlook 58.86 57.88


(Below 50 is decline/less confident above 50 is improvement/more confident, 50 is no different)*

When looking at the data from a regional level the findings also mirror the broader economic news agenda. The UK and the US, who were the most pessimistic of the countries surveyed in September 2011 (with country index scores of 40.65 and 41.53 respectively) have both improved (44.97 and 49.28 respectively) while Euro-zone countries, Germany, Spain and France have all seen drops in confidence. Again Canada is the most confident in their local economy with an Index score of 54.62 although still a drop from the 56.09 last time. South Africa’s attitude has improved slightly from September with their country confidence index score moving from 44.1 to 46.11. Malaysia and Singapore are still confident with a score of 51.53, but this is down from 53.26 last time

Business Performance and Challenges – revenues maintained, energy cost challenges

While local confidence is increasing and the rate of decline in global confidence slowing, there are still a number of challenges facing businesses. Rising inflation and the increasing cost of fuel, energy and raw materials topped the list with all countries citing this as their top concern apart from Spain, who cited uncertainty in the local economic market (which was the second greatest concern overall).

Reduced cash flow was the third biggest challenge although respondents in the UK see this as a greater threat to growth than local market uncertainty, again reinforcing the belief that, for markets where green shoots are starting to appear, it’s less about macro business confidence and more about concern for the day to day activities that constitute running a business. With elections looming in a number of the regions questioned, political instability scored highly in both South Africa (24%) and the US (23%) while in the UK and Canada it was a concern for just eight percent of businesses, again reflecting perhaps the approach taken by those Governments to make reducing debt and encouraging growth a primary focus.

Adds Berruyer: “The strength of our Index is that the data comes from real businesses giving genuine feedback on their confidence in both global and local markets. From these findings we can see the beginnings of a turnaround in business confidence with the rate of decline in macroeconomic confidence slowing and overall business outlook continuing to improve. While the overall findings suggest that the majority of firms are still focused on short-term results rather than planning for long term growth, it is to be hoped that come the next Index in six months’ time, these trends have been continued and indeed the results amplified.”

Notes to editors

About The Sage Group plc

About Sage
The Sage Group plc is a leading global supplier of business management software and related products and services, principally for small to medium-sized enterprises. Formed in 1981, Sage was floated on the London Stock Exchange in 1989. Sage has 6 million customers and more than 12,300 employees worldwide. We operate in over 23 countries covering the UK, mainland Europe, North America, South Africa, Australia and India. For further information please visit www.sage.com.

Contact information

For more information on The Sage Business Index - International Business Insights please contact

Ralph Charlton: [email protected] or
Jennie Whitell: [email protected]
or call Tel: +44 (191) 294 3193.

For press information please contact
Paul Wooding: [email protected] or
Sarah Martinez: [email protected]
or call Tel: 0207 025 6500

About The Sage Business Index

The Sage Business Index polled 10,009 small and medium-sized businesses across 10 countries – US, Canada, Germany, Austria France, UK, Spain, South Africa, Malaysia and Singapore over a two week period in March 2012. Businesses were asked a range of questions regarding such issues as business confidence and outlook, how they feel about the global and local economies and what challenges they currently face. For the full report inforgraphic, detailed data, graphics and country summaries, as well as to read to see the full results of the first and second Business Indices, please visit The Sage Business Index – Business Insights.

Survey Methodology

Populus provided online interviews with 10,009 decision makers in businesses in the UK, USA, Canada, German, France, Spain, South Africa, Malaysia, Singapore, Austria. The businesses were drawn from two sources:

  • 8,575 respondents were drawn from Sage’s local customer databases across the UK, USA, Canada, Germany, France, Spain, South Africa, Malaysia, Singapore and Austria. Sage’s local operating companies sent an email invitation to participate to specially selected databases with a survey link provided by Populus. In Malaysia and Singapore, customers were invited to participate via a letter which included the details of how to enter online. All responses were collected centrally by Populus.
  • 1,434 respondents were drawn from a dedicated online panel of business people, which has 2.4 million members worldwide. 200 interviews were conducted in all markets apart from Austria, Malaysia and Singapore where research was undertaken via Sage local operating companies, as above. A random sample of respondents whose profiles met the client criteria were invited to take part in the survey, ensuring a spread of business sizes and industries. Respondents were then asked a screener question to ensure that they were a decision maker at their business.

*Index Methodology

As this is the third Sage Business Index, we have applied an index methodology which allows us to measure the changing mood of the businesses surveyed in relation to business and economic confidence. The index is based on a scale of one to 100 where 0 means a significant decline, 100 means a significant improvement, and 50 means it is no different. For the business confidence question the scale translates to below 50 as less confident and over 50 is more confident, 50 is no different.

We retrospectively applied this index methodology to the countries that took place in the first business survey in February 2011 (US, Canada, UK, Germany and France) where the questions were asked as follows:

  • “Do you feel your country’s economy is recovering or declining?” and “Do you feel the global economy is recovering or declining?” Index scores have been derived from this data where answer options in this study, and their index score weighting, were: “It is recovering significantly (100)”, “It is recovering slightly (75)”, “It is no different (50)”, “It is declining slightly (25)”, “It is declining significantly (0)”
  • “Are you more or less confident of your business prospects over the next year?” Index scores have been derived from this data where answer options in this study, and their index score weighting, were: “More confident (75)”, “No different (50)” and “Less confident (25)”

About Populus

Populus is an opinion research and consultancy firm that specialises in understanding the views of the general public, customers, businesses and key stakeholders. Best known for its social and political research as pollsters to media organisations such as The Times, the BBC and ITV News, it conducts large, regular, research programmes for a wide variety of clients, such as large multinational companies in retailing, food manufacturing, pharmaceutical, financial services and communications sectors, to public institutions, membership organisations and NGOs.

Populus has significant experience in:

  • one-to-one depth interviews with senior decision-makers and stakeholders (e.g. Members of Parliament, senior business executives, investors and analysts, specialist journalists, government advisers and civil servants, members of EU institutions, and leaders of NGOs and trade associations);
  • constructing bespoke online panels for clients wishing to engage with their stakeholders, memberships, or consumers on a continuing basis;
  • employing call-centre based or access panel research both nationally and internationally for polling Business to Business groups, the general population and specific sub-samples of the public;
  • organising focus groups – including among hard-to-reach groups – to gain greater understanding of what drives opinion and motivates key audiences or to test messaging concepts and to use stimulus material.