UPS EUROPE BUSINESS MONITOR

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UPS EUROPE BUSINESS MONITOR

  1. 1. UPS EUROPE BUSINESS MONITOR EXECUTIVE SUMMARY XIII
  2. 2. Contents 2 Foreword 12 When, if at all, do you think that the 20 Should the EU expand beyond the 31 Executive insight Notes on the research euro will displace the US dollar ten new members, and if so, which 32 Have you cut back on your personal 3 Main findings as the most important international countries should be included? spending in any of the following areas 4 Business climate across Europe reserve currency? 21 How should the EU set its priorities after due to the current economic situation? 5 Is the economic position of your 13 Which global area do you consider to EU enlargement? 33 Has your attitude towards the company better, worse or about the be your country’s most important 22 In which ways, if any, should the EU prioritisation of work and private same as it was 12 months ago? business partner over the next reform its legislative processes? life changed during the course of 6 Twelve months from now, do you think five years? 23 Business practices your career? the economic position of your company 14 Which industry sectors do you believe 24 Which of the following work practices 34 What is your favourite food? will be better, worse or about the same will be the engine of your country’s are prevalent in your company? 35 Thinking about when you were as it is now? economy within the next five years? 27 If your company has a Corporate Social eight years old, what did you aspire 7 Over the next 12 months, does your 15 Of the next ten countries to join the EU Responsibility (CSR) policy, which of to become? company plan to increase its workforce, which one will offer the best potential these does your company do? 36 Contact details reduce its workforce or will it remain for your business? 28 Which of the following employee about the same as it is now? 16 European business perspectives benefits do you think give the best 8 Which budgets are most likely to be cut 17 Within the first year of accession of the overall return for businesses in terms first if your company profits drop? next ten EU members, which factors of recruitment and retention? 9 Has your business been affected will offer the biggest benefits for 29 What are the least pleasant aspects by the conflict in Iraq in any of the your company? of your job? following ways? 18 What will be the biggest challenges for 30 What two pieces of advice would you10 Prospects for European business your company, when the EU enlarges to most likely give to students to prepare11 In the next three years, which Western include the next ten members? themselves for their future career? European countries do you think will 19 When do you think your company will show strongest economic growth? see benefits from the upcoming round of EU enlargement? 1
  3. 3. Foreword UPS annually commissions the UPS Europe to business and whether enlargement should Interviews were conducted in the following Business Monitor survey to provide the latest continue beyond the next round. Finally, we took countries: Belgium (101), France (250), Germany insight into the changing opinions, attitudes and the opportunity to ask respondents about their (250), Italy (250), the Netherlands (100), Spain habits of European business leaders. The Business working habits and predictions for European (251) and the UK (251). Respondents are at Monitor offers a barometer of opinion founded on business practices. director level. The average annual revenue of the our respondents’ extensive experience in the world businesses interviewed is 1.45 billion euro; their of industry and commerce. To make the research more accessible internationally, average employee size is 3,400. Interviews were this edition and all previous years’ results of the conducted by independent global market research The UPS Europe Business Monitor aims to provide UPS Europe Business Monitor will be available on a organisation, TNS, using the respondents’ native UPS and its customers with a better understanding specially created website at www.ebm.ups.com language from the TNS International Telephone of the issues driving business decisions in Europe from January 2004. Unit in London, UK. and the world. A note on the research Graphics shown are abstracts of key findings from This thirteenth edition of the UPS Europe Business The thirteenth edition of the UPS Europe Business the full survey results. Figures may total less than Monitor once again considers some key issues Monitor surveyed 1,453 business leaders from 100 per cent where only partial data are shown or facing business leaders: the business climate across Europe’s top 15,000 companies by revenue more than 100 per cent where more than one Europe, economic and employment forecasts for between September 23rd and November 10th response was allowed. Western European companies and prospects for 2003. This survey takes place annually. European business. In addition, and with the imminent enlargement of the European Union, we asked business leaders about the new member states, the benefits and challenges they will bring2
  4. 4. Main findingsThis year we see an encouraging revival in the EU enlargement is expected to dominate the scarce. Despite shaky stock performances in recentproportion of European companies reporting European political agenda in the coming months, years, executives still rate company pensions asimproved corporate performance over the previous and the survey focuses on the impact this will have key to enticing and retaining their staff the best.12 months. Their outlook for the next 12 months is on business. Of the ten new member states, Polandeven more positive. However, workforce forecasts is clearly in pole position to offer best business Today’s top executives least like long hours andremain gloomy, with more jobs likely to be cut potential. However, over a quarter of survey tedious meetings, and many admit they have notthan added. respondents foresee no business gain from any been able to change their work/life balance. Their new members and, significantly, over half want no advice to get to the top is to learn languages andBusiness leaders report little effect of the Iraq further enlargement of their club. Benefits are not be mobile. They share similar childhood aspirationsconflict on their business, nor a need to curb likely to be immediate, but will include a wider to compete and fly, yet their cultural differencespersonal spending. However, they warn that HR internal market and simplified procedures and show clearly through their favourite dishes, whereand Training budgets could be most at risk if profits standards – though not without a price. Meanwhile they conservatively stick to their national cuisine.drop, and reveal the industry sectors predicted to business tells the EU to focus on harmonising taxesdrive their nation’s future economy. Overall, and abolishing the right to veto.European executives’ opinions are still split onwhether the euro or US dollar will dominate as the The survey further reveals which working practicespremier global reserve currency. Interestingly, are now prevalent in companies; five years afterbusiness leaders in the UK now believe in the euro, these were first predicted. Flexitime is nowwhereas their colleagues in Germany, Italy and the mainstream, and many companies offer a non-Netherlands support the dollar – a dramatic smoking environment and follow a CSR policy orturnaround from previous years. practice. However, childcare facilities remain 3
  5. 5. Business climate across Europe Upturn in European corporate performance over Corporate optimism continues to rise potentially one of increased job losses across past year across Europe Europe among these large companies, repeating More companies now think things have improved In line with better overall corporate performance, the gloomy news for the third year running, over the past year, compared to those thinking not surprisingly, European business leaders have especially for businesses in Belgium, Germany and things have got worse. The reported net difference continued their increased optimism about the Netherlands. However, business leaders in between better and worse – which had fallen prospects for the next 12 months. This optimism Spain are alone to forecast slightly more recruitment dramatically to zero in 2001 and had remained has bounced back to reach levels regularly than job cuts, and job losses in the UK may at least low in 2002 – has now revived as corporate predicted in UPS Europe Business Monitors during be stemmed. performance improves among Europe’s major the mid-nineties. Business leaders in the UK again companies. report the highest optimism, followed by those in Business little affected by Iraq conflict, yet Germany and Spain. In comparison, executives in Human Resources, Training and Marketing on Most countries show a strong and positive upturn, France remain most cautious, reflecting low the line if company profits drop though France and the Netherlands are alone with corporate performance. Although some companies have cut business a balance tipped towards a negative performance travel, most claim not to have been affected by outlook. However, Spain and the UK in particular More firing than hiring, despite better the recent conflict in Iraq. However, companies have shown strong improvement in their corporate performance and higher optimism faced with a squeeze in their profits report that position, the former retaining its top spot in Europe Despite more companies reporting a better HR, Training and Marketing budgets are most likely for the third consecutive year and the latter performance and much greater optimism for their to be on the line, and even senior managers are enjoying a marked revival over the past two years future economic position, workforce predictions not safe from cost-cutting measures. Customer from a position of negativity in 2001. overall for the next 12 months have remained as service departments, nonetheless, remain out of bleak as they were last year. The message is the firing range.4
  6. 6. Business climate across Europe 67Is the economic position of Better 2000your company better, worse 57 57 60 60or about the same as it was 52 50 53 52 54 51 Better 200112 months ago? 50 42 43 43 Better 2002 40 41 46 40• European businesses report an upturn 44 33 32 36 36 36 40 36 35 Better 2003 28 30 28 29 29 34 30 35 26 26 32 26 24• Spanish mostUK companies prosper and 20 21 21 20 Worse 2000 17 16 16 Worse 2001• French corporate fortunes slump further, German companies 6 6 8 8 2 Worse 2002 0 bounce back 3 8 7 7 6 7 7 11 10 10 Worse 2003 13 11 13 14 16 15 16 20 21 21 20 20 Net 23 24 24 23 (Better minus Worse) 27 28 27 30 30 31 33 33 33 36 36 36 35 36 41 44 Total Belgium Germany Spain France Italy Netherlands United Kingdom Full results and historical data are available online at www.ebm.ups.com COUNTRIES SURVEYED % 5
  7. 7. Business climate across Europe Twelve months from now, do Better 2000 70 71 you think the economic 68 65 Better 2001 position of your company will 62 66 62 59 59 60 64 58 64 be better, worse or about the 57 55 56 58 57 56 59 Better 2002 same as it is now? 50 49 51 57 51 49 56 48 54 52 51 46 52 • Corporate optimism continues to rise across Europe 50 44 39 49 50 38 44 47 45 45 42 37 42 42 47 48 Better 2003 41 35 37 Worse 2000 • UK, Spain and Germany show most buoyant forecast 29 36 35 34 33 33 34 Worse 2001 23 • France remains most cautious, reflecting its low corporate 19 19 17 20 Worse 2002 performance Worse 2003 4 4 Net 5 5 6 6 7 7 7 7 6 7 6 8 6 (Better minus Worse) 9 10 9 9 9 10 12 11 12 12 15 14 15 20 19 20 19 Total Belgium Germany Spain France Italy Netherlands United Full results and historical data are available online at Kingdom6 www.ebm.ups.com COUNTRIES SURVEYED %
  8. 8. Business climate across Europe 48Over the next 12 months, does Increase 2000your company plan to increase 41its workforce, reduce its 36 36 36 Increase 2001 35workforce or will it remain 31 28 31 Increase 2002about the same as it is now? 29 26 26 29 24 22 20 20 20• In light of improved performance and buoyant optimism, job 17 18 19 17 18 18 12 16 19 13 19 17 23 18 19 14 15 19 Increase 2003 15 10 Decrease 2000 prospects still look gloomy 11 9 6• Almost onecut staff companies forecast to third of 5 6 Decrease 2001 2 3 2 5 Decrease 2002• Again, only in Spain companies are planning overall job increases 12 10 8 12 16 16 11 12 13 15 15 13 Decrease 2003 17 17 19 20 20 19 21 19 21 22 23 22 23 23 23 25 25 24 Net 26 28 29 30 29 (Increase minus Decrease) 30 29 32 33 32 35 34 36 39 40 39 39 42 41 Total Belgium Germany Spain France Italy Netherlands United Kingdom Full results and historical data are available online at www.ebm.ups.com COUNTRIES SURVEYED % 7
  9. 9. Business climate across Europe Which budgets are most likely A Human Resources and Training to be cut first if your company 40 B Marketing profits drop? 36 • Two-fifths the going gets and Training if would axe HR tough C Operations D Transport and Logistics • Senior feel a pinch if budgets would management faced with E Senior Management 25 a squeeze 23 23 F Research and Development • The customer is king; customer service is non-negotiable 21 18 G IT and Systems H Customer Service Departments 6 A B C D E F G H Full results and historical data are available online at8 www.ebm.ups.com BUDGETS MENTIONED %
  10. 10. Business climate across EuropeHas your business been A Business not affected by the conflictaffected by the conflict in Iraq 54 B Reduction in business travelin any of the following ways?• Despite the usual across Europe’sis business as conflict with Iraq, it C Decrease in customer orders top companies D Increased expenditure on security measures• Onlycustomer orders have been say one-fifth of business leaders E Cutback of expenditure in other areas of business reduced F Reduced staff presence in Middle East• A quarterinternational travel cut back on of companies have 24 G Lower branding profile in Middle East 19 18 H Cut back in staff 10 6 5 4 A B C D E F G H Full results and historical data are available online at www.ebm.ups.com EFFECTS MENTIONED% 9
  11. 11. Prospects for European business Spain again predicted to show strongest ITT predicted to be main driver of European Europe will be best regional partner for future economic growth economies business and Poland offers best potential among This year the consensus among European business Overall, information technology and telecoms (ITT) new EU members leaders is that Spain is again most likely to show is forecast to be the most influential sector across When asked which global area business leaders strongest economic growth over the next three European economies over the next five years, consider to be their country’s most important years. The UK, German and French economies though differences between the European nations business partner over the next five years, almost follow. Spanish and UK executives continue to are notable. The automotive industry is predicted to two-fifths opt for Western Europe and a further fifth show strong confidence in their own economies, drive the German economy, the UK will rely on the identify the former Eastern European countries. while German and French business leaders have financial and insurance sector and Spain will build Business leaders in Belgium, Spain, France, the lost their self-belief. on tourism and construction. France will be most Netherlands and the UK all agree that Western wired into ITT, the Netherlands will rely on both Europe will be their country’s most important Will the euro or dollar dominate as premier manufacturing and finance and Belgium will be business partner. Senior executives in Germany and global currency? driven by both pharmaceuticals and ITT. In Italy, a Italy, however, look beyond Western Europe to The prediction on the euro’s ability to displace the combination of sectors will prove the driving force China and Eastern Europe for partnership. In US dollar as the most important international for their economy. addition, Poland is undeniably the most attractive reserve currency is still undecided, as opinion in new EU member for European companies, though a Europe is more or less split down the middle. quarter see little business potential in any of the However, remarkably, the UK has become far less new EU member states. euro-sceptic and more than half of its business leaders now support the euro, whereas more than half in Germany, Italy and the Netherlands now side with the US dollar.10
  12. 12. Prospects for European businessIn the next three years, which 2000Western European countries do 54 53you think will show strongest 51 2001 49economic growth? 48 2002• Spain once again crowned as Western Europe’s biggest growth 2003 38 prospect 34 34• Confidence in Francetodrops as Germany moves up third place 29 33 29 30 31 32• UK shows steady rise 22 25 23 22 18 17 16 14 13 13 13 13 12 11 11 10 10 5 Spain United Germany France Italy Portugal Ireland Netherlands Full results and historical data are available online at Kingdom www.ebm.ups.com COUNTRIES MENTIONED % 11
  13. 13. Prospects for European business When, if at all, do you think 1999 2000 2001 2003 that the euro will displace the 2 1 3 0 6 4 1-2 years 1 US dollar as the most 2 1 4 2 11 1 3 4 5 2 2 2 17 6 19 18 important international 7 1 1 2 6 15 9 3-5 years 2 2 14 21 16 13 13 19 16 12 2 8 2 2 1 reserve currency? 9 8 8 2 10 11 15 4 3 14 9 13 1 1 8 6 6 8 14 21 1 0 5 6-10 years 26 26 11 13 11 21 • Opinion still split on whether the euro or dollar will dominate 20 13 14 12 12 12 6 17 12 14 8 6 26 14 15 11 11 19 18 25 16 18 12 18 18 12 8 2 11 12 11-20 years 13 14 18 14 14 10 9 12 10 15 10 15 13 11 10 11 12 28 8 10 • British companies are now falling for the euro 7 9 13 16 10 7 16 11 9 5 8 9 10 10 9 11 18 8 12 18 16 9 5 7 11 7 10 16 16 21 8 6 10 6 13 21 20+ years • BusinessNetherlandsGermany, Italy and the leaders in back the Never dollar as premier global currency 28 27 30 33 35 37 37 37 38 39 41 40 41 42 42 44 43 43 43 45 47 50 50 50 54 53 56 57 61 64 66 71 Total Belgium Germany Spain France Italy Netherlands United Kingdom Full results and historical data are available online at12 www.ebm.ups.com COUNTRIES SURVEYED %
  14. 14. Prospects for European businessWhich global area do you A Western Europe 37consider to be your country’smost important business B Eastern Europe, includingpartner over the next five the new EU member statesyears? C China• Western European companies predict their country will look D North America close to home for future business 20 20• Business leaders start to focus their sights on links with Eastern E Asia-Pacific Europe F Central and South America• A third of German and Italian companies pin their hopes on G Africa and Middle East China 8 6 4 2 A B C D E F G Full results and historical data are available online at www.ebm.ups.com AREAS MENTIONED % 13
  15. 15. Prospects for European business Which industry sectors do you United A Information technology Total Belgium Germany Spain France Italy Netherlands Kingdom and telecoms (ITT) believe will be the engine of A 33 43 38 20 44 28 38 28 B Financial and insurance your country’s economy within the next five years? B 20 28 5 3 22 5 44 53 C Leisure services/tourism • ITT predicted to be economies force for European main driving C 17 6 2 35 19 28 2 12 D Automotive D 17 2 60 17 13 8 1 0 E General industrials • The Automotive sector will steer the German economy E 16 5 19 14 6 24 43 11 F Chemicals/ F 16 43 29 4 18 4 28 8 pharmaceuticals/biotech • Finance and Insurance believed to accelerate UK business G 14 20 6 4 26 11 14 22 G Media and business services H Utilities, energy and raw H 13 14 8 23 15 12 23 3 materials I 13 12 6 4 13 25 24 11 I Consumer goods (household and textiles) J 11 4 4 36 6 13 2 5 J Building/construction K 9 5 2 5 25 13 4 4 K Consumer staples (farming, food and beverages) L 6 20 3 3 7 6 14 4 L Transport and logistics Total Belgium Germany Spain France Italy Netherlands United Kingdom Full results and historical data are available online at14 www.ebm.ups.com COUNTRIES SURVEYED %
  16. 16. Prospects for European businessOf the next ten countries to A Polandjoin the EU which one will 44offer the best potential for B Czech Republicyour business? C Hungary• Poland is considered the leading light for business potential D Slovenia• However, over a quarternew EU executives believe the of 27 E Lithuania member states will have little to F Slovakia offer business G Estonia H Cyprus I Malta 9 5 J Latvia 1 1 1 K None of them 0 0 0 0 A B C D E F G H I J K Full results and historical data are available online at www.ebm.ups.com COUNTRIES MENTIONED % 15
  17. 17. European business perspectives Businesses look forward to EU enlargement for reaped immediately; many foresee a wait of at Businesses tell EU to prioritise tax wider internal market and simpler regulations, least a year after accession before seeing any and harmonisation and abolish the veto but fear lack of standardisation in new EU some expect none for at least five years or more. Companies want the EU to harmonise internal markets market taxation, complete the internal market and Asked about the biggest benefits and challenges to Cautious response to further expansion beyond gain full compliance with existing EU regulations. their companies when the EU expands to include a the ten accession members There is a preference to see the EU prioritise a further ten members, respondents expressed as While around a quarter of executives foresee no common foreign and defence policy and reform the many hopes as fears. While the expansion of the benefits to their company from the upcoming CAP (Common Agricultural Policy), rather than EU offers a wider internal market and will simplify round of EU enlargement, even more are sceptical further expand EU membership. In particular, administrative procedures and standards with new about the EU opening its membership club further. Belgium and the Netherlands would like to see the member states, it is the initial lack of Over half of Europe’s business leaders feel there EU tackle compliance and the UK wants to push a harmonisation in these areas that will provide the should be no more members beyond the ten reform of CAP. In terms of prioritising the EU’s own greatest challenge when borders are opened up. accession countries; senior executives in France internal reform, nearly half of the business leaders Companies will perhaps need to accept these and Germany are most resistant to further want to abolish the veto (unanimity voting) and short-term challenges to achieve longer-term gains. expansion. Where new countries are mentioned, give more power to the European Commission. Likewise, over a quarter look forward to cheaper none received more than 12% of mentions and Executives in Spain, Italy and the Netherlands are labour costs, but a third acknowledge that this may few see further enlargement as an EU priority. keen to empower the Commission, a concept in return threaten their competitiveness, though foreign to most UK business leaders who feel that some executives recognise benefits in the wider member states should be given more power. skills base and employment market that EU expansion will offer. Benefits are not likely to be16
  18. 18. European business perspectivesWithin the first year of Larger internal marketaccession of the next ten EUmembers, which factors will Simplified administrativeoffer the biggest benefits for procedures and standards 62 with new member statesyour company? 60 Removal of border controls• Overall, half cite a larger internal market as a major plus point of EU 49 49 54 48 47 47 Lower labour costs enlargement 45 45 46 45 42• Business looking forward toand Italy are leaders in France 36 36 Cheaper source of raw materials 33 3232 simplified procedures 31 31 31 28 29 29 Wider employment market 27• Removal of border controls also likely to benefit business 25 21 22 21 26 22 22 22 21 21 23 and skills base 19 17 17 16 16 17 14 13 13 12 11 11 Total Belgium Germany Spain France Italy Netherlands United Full results and historical data are available online at Kingdom www.ebm.ups.com COUNTRIES SURVEYED % 17
  19. 19. European business perspectives What will be the biggest A Lack of harmonisation of standards and regulations challenges for your company, 40 across new member states when the EU enlarges to B Threat to competitiveness include the next ten members? from lower labour costs in new member states • Two-fifths standardisation anticipate of business leaders 33 32 C Finding compatible business partner problems across EU member states 25 D May weaken own country economy • One-third fear the effect of lower labour costs 20 E Language barriers • A quarter think EU enlargement may weaken their country’s 16 14 14 F Setting up shop economy G Threat of decreased security/increased crime H Recruitment of qualified personnel A B C D E F G H Full results and historical data are available online at18 www.ebm.ups.com CHALLENGES MENTIONED%
  20. 20. European business perspectivesWhen do you think your 20 15 Already docompany will see benefits 27 17 11 18 13from the upcoming round of EU 24 Between now and accessionenlargement? 4 4 Within a year after 4• Immediate benefits not expected 3 11 10 10 2 9 2 8 accession 1-5 years after accession• One in ten foresees no benefit in expansion 4 11 17 3 8 6-10 years after accession 35 37 43 Not for at least 10 years 38 after accession 45 30 36 43 Never 19 17 12 10 12 10 8 6 8 10 7 6 2 3 5 4 6 6 10 9 10 11 14 14 Total Belgium Germany Spain France Italy Netherlands United Full results and historical data are available online at Kingdom www.ebm.ups.com COUNTRIES SURVEYED % 19
  21. 21. European business perspectives Should the EU expand beyond 57 A Russia the ten new members, and if B Turkey so, which countries should be included? C Romania • Big may not be beautiful; majority agree expansion of the EU should D E Switzerland Bulgaria now stop F Croatia • Russia named despite not being in the running for EU entry G Ukraine H Norway • Business leadersstrongest about France feel the in Germany and I Belarus shutting the door to any more J No new members members 12 The following countries • The Netherlands would keep the door ajar 11 scored three per cent or less: Albania, Serbia- Montenegro, Moldova, 6 6 6 5 FYROM (Macedonia) 4 4 4 A B C D E F G H I J Full results and historical data are available online at20 www.ebm.ups.com COUNTRIES MENTIONED %

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