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Which sectors will be successful in the recovery stakes?

Which sectors will be successful in the recovery stakes?

BDO LLP, the global accountancy and business services firm, believes that we will see a clear division this year between companies that take up opportunities to grow and those that are left struggling behind in difficult markets.

BDO’s latest Industry Watch report forecasts a slight rise in business failures in 2012-13. At the same time, it says all sectors will see growth prospects increasing as the economic recovery gets underway. However, it will be a two-speed recovery with firms that are prepared to exploit new markets and increase online sales leading the way, whilst those that depend on cautious consumers and high street sales lagging behind.

Shay Bannon, a business restructuring partner at BDO, explained that companies with innovative products and new distribution channels will have a significant advantage over their competitors, regardless of the sector they operate in. Those who fail to respond run a much greater risk of finding themselves in difficulties.

Firms in the technology, media and telecoms sector are best placed to outperform the wider economy as all industries realise the need for innovative technology if they want to be successful and grow.

On the other hand, companies dealing in property and construction, business services and the leisure industry are still experiencing difficult market conditions. The retail sector also has both challenges and opportunities with the winners being those with a strong on-line presence. Retailers who are prepared to adopt new mobile shopping technology could well be set to reap the rewards.

UK businesses that are prepared to break into Far Eastern markets are also expected to do well. Manufacturers have benefited from the weak pound. Falling inflation and low interest rates and those companies that can adapt their products for new overseas markets should continue to flourish.

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Image: British Telecom tower by SPakhrin

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