Is there a better indicator of the state of the economy than the call volumes of a Telephone Answering Service?
As the fall out from the collapse of the US housing bubble spread through the world’s financial markets, calls received at Office Response started to fall in January 2008 and continued downward as we headed towards Easter of that year. Britain’s economic recession was officially announced a full 12 months later after 2 consecutive quarters of decline in the size of the economy. We spotted the trend a long time earlier and acted to reduce our cost base, unfortunately including making redundancies, months before many other UK business followed. The FTSE 250, often a better UK economic indicator than it’s big brother the FTSE100 that get’s 80% of income from outside the UK, did not bottom out until June 2008.
Whereas we have specialities in some market sectors, our client base is taken from many diverse business types and the depression in calls was directly related to the falls in activities of the general economy. Telephoned enquiries come many months before the flow of funds that follow the actual placing of orders hence the unique position we have as an economic indicator.
And what’s happening now at Office Response? Well, taking into account seasonal factors, we have just recorded call numbers for March 2010 at 8.7% above our predictions; it’s a bit early to be announcing a new trend of economic activity but it’s interesting none the less.
What might be going on? Is it increased business profits? Our financial year end is March and we are back to a healthy profit position principally as a result of our lower cost base. I’m sure that many businesses may be similarly profitable and could be releasing their purse strings as a result of the confidence that the profits bring - perhaps consumers are going on a pre-election splurge prior to a possible VAT rise? We would preach caution until we see the effects of the inevitable slashing in government spending and the expected hike in taxes that will be needed to tackle the country’s budget deficit but the upturn we’re experiencing is pleasant none the less.
We’d be interested in your feedback about the state of your organisation’s finances and outlook. We will keep you posted about our call volumes. For the brave, is now the time to invest in some of the UK’s smaller stocks?
by Martin Blain
Sales Director
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