Big business expects brunt of financial crisis this year

Published by rudy Date posted on January 29, 2009

THE results of the latest survey among members of the Makati Business Club showed that the majority expects the brunt of the global financial crisis to hit this year.

Ninety-three percent of respondents said their businesses would be affected by the crisis, with 29-percent saying they would suffer a “substantial” impact, and 64-percent saying the slowdown would have a “slight” impact on their companies. Only 7-percent said the present global economic slowdown would have no impact on their firms.

“Recession was already happening in the US even before the financial crisis exploded in October 2008, so weak US demand was bound to affect us anyway. The financial crisis exacerbated what should have been a mild economic crisis,” said Alberto Lim, Makati Business Club executive director. But even if business executives expect a bad year, only 19 percent of those surveyed said they might shed workers this year.

Among those who see possible work displacement, 46-percent said they might reduce their workforce by between 3 percent and 10 percent. Twenty one-percent said they would dismiss about 20 percent to 30 percent of their employees, 13 percent might cut the number of their workers by around 50 percent to 60 percent, while 8 percent could displace as much as 90 percent of their manpower. The remaining 12-percent failed to disclose the extent of their likely workforce reduction.

According to the survey, 58 percent of firms considering the option of downsizing their workforce are service providers, 21 percent are manufacturers, 17 percent are exporters, and 4 percent are importers. The poll was conducted among 126 members the Club between January 16 and 23. –Ben Arnold O. De Vera, Reporter, Manila Times

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