Aug 27, 2012
SA firms face fewer constraints than Bric counterparts but skills a major concernBack
Africa|Grant Thornton Johannesburg|System|Africa|Brazil|China|India|Russia|South Africa|Equipment|Finance|Long-term Finance|DAVID CAMPBELL
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The latest Grant Thornton 'International Business Report' (IBR) again highlighted the lack of a skilled workforce and overregulation as the two biggest blockages for economic growth.
Thirty-eight per cent of South African executives said that the skills shortage affected their business (36% Bric), while 37% believe that overregulation and red tape were hindering growth (36% Bric). Both South Africa and the Bric nations are more exposed to these constraints than the rest of the world.
However, South African businesses faced significantly fewer constraints to expansion than companies in other Bric nations, with local executives feeling less constrained by the cost of finance, access to long-term finance and order demand.
The quarterly survey, which looks at the views of senior executives in privately held businesses all over the world, revealed that 35% of Bric businesses experienced shortages in terms of the quantities of orders being placed, while this was only the case for 18% of those surveyed in South Africa.
“The South African economy has been insulated from much of the global market turbulence owing, in part, to the country’s top-ranked audit and accounting standards, a sound banking system, and well-regulated stock exchange,” said Campbell.
Forty-five per cent of businesses in the Bric countries plan to increase investment in R&D over the next year, compared with just 18% of businesses in the Group of Seven nations (G7).
Similarly, 47% of Bric businesses plan to increase investment in plant and machinery over the next 12 months, compared with 37% in the G7.
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