So who are the real twits….?

Last Friday I had a friendly spat on Twitter with Management Today magazine. Well that’s what Friday afternoons are for aren’t they? The issue that sparked our exchange was a gloomy forecast from advertising giant WPP and MT’s assertion that if WPP was having problems then what hope was there for the rest of us.

I admit I took exception to this. Perhaps the tone grated after another week of working with successful businesses. Perhaps it was the frustration of seeing yet another botched attempt by policymakers to resolve the Eurozone crises. Anyway I wasn’t very happy and I let MT know about it.

Of course it all ended amicably with MT retweeting my tongue in cheek reasons to be cheerful comment about the sun shining, the prospect of an extra hour in bed as a result of the clocks going back and last week’s news of an increased level of investment in the US. And I do understand that in today’s 24 hour online world, media organisations need regular news and angles to hook readers before this morning’s news becomes this afternoon’s web browsing history. But there is a real danger of a double dip recession becoming a self-fulfilling prophecy.

When asking people at networking events as to how things are going I invariably get a response of “It’s tough out there” coupled with “but we seem to be doing OK”, the latter being seen as a cause for embarrassment rather than a reason for celebration.

The daily flow of conflicting statistics does not help. This week GDP was up 0.5% although some commentators said that this was not actually good news and that the figure will be revised in due course anyway. Within this GDP number construction output fell. Bad news then? Well no, Caterpillar have announced that they are on track for a record year. JCB orders are apparently booming. Somebody out there clearly does think that construction in general is moving in the right direction and are investing accordingly.

It would be naïve of me not to recognise the threat to global economic recovery posed by the problems in the Eurozone. But there are many good things happening too which need to be recognised and highlighted. The majority of businesses in the UK and beyond are getting on with their lives and continuing to do their best to create wealth and jobs.  

So there you have it. Two points of view for you to consider. False optimism versus unreasonable pessimism. Not facing up to the facts versus accentuating the negative. Who are the real twits in all of this? It is probably too close to call at present. 

Dip and Double-Dip

Drat and double drat as Dick Dastardly used to say. Or should that be dip and double-dip. A Deloitte survey has just revealed that confidence has reached an 18 month low among CFOs in the City, and that more than a third of those questioned believed that the UK was heading for a double-dip recession.

Finance chiefs are not paid to be cheerful (well not until they become CEOs and are magically transformed into over optimistic flag waving cheerleaders for their businesses) so for them to be so pessimistic is clearly par for the course. But there is at best an eerie silence surrounding the economy at the moment as UK plc waits with bated breath for the comprehensive spending review to unveil its conclusions on October 20^th.

There is even a sense within the coalition government that maybe they have managed expectations too well, and Whitehall is now echoing to the sound of ministers furiously back peddling and letting it be known that these cuts may not be as bad as feared, or maybe scaled back if the economy starts tanking again.

Then you have Philip Green saying that the Government is rubbish at buying stuff and could save billions just by better procurement. Great stuff, until you realise that Government buys from the private sector and these "efficiency gains" are actually cuts by another name.

We all recognise that the public sector is living beyond its means, and that spending has to be reined back now to avoid more serious austerity in the future. However the necessary initiatives to help smaller businesses take up the slack are conspicuous by their absence. 

Economies feed off of confidence, and this is a commodity that is in very short supply at the moment. It is particularly frustrating as many businesses are having a good year, and in normal circumstance would probably be planning for further growth. Now all I hear is “well let’s just wait and see how the cuts affect us.”

For what it is worth, most of the evidence I have come across so far is pointing to the fact that we will probably avoid a double dip. However there is a danger that it probably won’t seem like it, which to my mind is the worst of all worlds.