2009-06-18

By Editor, CIR

UK companies are postponing or scrapping plans to expand overseas because of the recession, a new survey suggests.

Management consultants Roland Berger's study 'Bleak Times' observes that the cutbacks risk undermining firms' prospects for benefiting from economic recovery.

The study, carried out for the firm by market research group Vanson Bourne, interviewed 200 executives at UK multinationals with annual turnover of £200 million and above. It found more than three out of four companies were delaying expansion plans by more than a year, and 60% had put off plans by two years or more.

Two in three companies blamed the global recession directly for hampering their ability to finance and invest management time in developing internationally. More than a third of companies were reducing investment in the 'BRIC' (Brazil, Russia, India and China) economies, against 39% cutting back in western Europe and 31% in North America.

According to David Stern, managing partner at Roland Berger, firms in the US and Germany have also put expansion plans on hold but he said that British companies should remain alert in the race to enter or expand in key emerging markets as investment opportunities occur.

By concentrating too much on controlling costs and halting overseas investment, "UK companies will lag behind in the globalisation stakes when recession bottoms out," he added.

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