International Factors Group update
Economies, markets and opportunity still there I
n this column last month, we talked about the way that the global economy continues to
demonstrate significant diversity and unpredictability in its recovery pattern. The example of the recently announced third quarter GDP growth figures for the UK proves the case in point, at 0.8% being more or less double what had been the consensus prediction. Yet this surprisingly powerful growth has done little to create a positive attitude in the country as commentators grapple with the concern that the deflating effects of the government’s fiscal consolidation controls will dampen demand and growth. With reduced public demand, the UK will need to look to the private sector to create continuing expansion and employment; in what may be a subdued domestic environment, it’s certain that service and manufacturing export volumes will need to be stimulated to maintain growth in the economy.
And across Europe the patterns continue to diverge. An example of this is how the east is demonstrating a rapid, but variable, turnaround in GDP growth forecasts for 2010; Russia and Ukraine have improved dramatically, from -8% in 2009 to +5% and from -15% to +4% respectively. Smaller Baltic neighbours Lithuania and Estonia have come back from the depths to modest growth, although Estonia is likely to remain just negative. In central Europe, the Czech Republic and Slovakia are staging positive returns also. Serbia and Slovenia have recovered, while Croatia, Bulgaria and Romania may not yet have turned the corner.
38 November/December 2010
And of course the list goes on. Manufacturing and export economy- based nations like Germany and Holland are benefitting from the relative exchange position of the euro, while Ireland, Spain, Portugal and Greece continue to face their challenges, whether it be in the search for growth, maintaining employment levels or controlling the cost of funds.
The east is demonstrating a rapid, but variable, turnaround in GDP growth forecasts for 2010
At a broader level, the divergence
in growth between the developed economies and the emerging is likely to continue to expand. The EIU Global Forecasting Service suggests that in 2011, world trade in goods will grow by around 4% in developed economies and by 8% in emerging markets.
So when one stands back, from a distance the message becomes increasingly apparent. Economic growth and capital flow will disproportionately be associated with the emerging economies. And it’s in these emerging locations that the support of the International Factors Group in developing and facilitating two-factor business, creating awareness and networking capability is becoming increasingly important. It’s in dealing with these new markets that it is most likely an invoice finance provider will need to have a reliable network of common thinking businesses; people who they can be sure of and work with to create a credible, viable presence.
Business Money
Over recent months, the IFG has been very successful in attracting new members who recognise the importance of the two-factor system and the support it can provide. Not only for these new members, but also for existing established members, the IFG’s education programme is becoming increasingly key in developing understanding and awareness, helping providers gain the necessary expert knowledge required to work successfully in new, and existing, markets. 2010 saw the launch of our highly successful new initiative, the IFG Academy. It’s hard to believe, but the first full cycle of this innovative programme will conclude on 2 December in Brussels. The inaugural attendees will complete their studies, which have taken place through the course of six residential modules spread over the whole year, and they will then learn if they have been successful in achieving the Factoring Professional Diploma, a new standard in industry knowledge. The programme will run again in
2011 and will be based in Vienna, in the offices of Raiffeisen International Bank. Applications are already coming in and in next month’s article we will discuss the content of the course in more detail. For now, suffice it to say that this programme will be of real benefit to management level employees in factoring and invoice discounting companies in both developed and emerging markets. It is a clear application of the IFG’s closely held belief that education is one of the main keys to the global development of our industry.
International Factors Group, Belgium, tel: +32/2 772 6969,
www.ifgroup.com
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