“How’s business?” It’s often one of the first questions asked when people meet. The reply either tells you something about their business, or the wider economy.
Predicting the future is a key business function, whichever sector you’re in and to do this there’s two basic forms: Internal and external.
Internal is what you are doing yourself and can include sales leads and your order pipeline for goods or services. It’s relatively easy to make a judgement about the next 12 months, often based on your past performance and market feedback.
External tends to be what your competitors are doing and the wider economic or social backgrounds.
Being aware of market trends is a key piece of knowledge; being able to determine what actions you take – and crucially when – in your business demands a level of skill and risk. That’s what being an entrepreneur is all about.
But what about the wider economy?
For all modes of transport predicting the future with any degree of accuracy has suddenly become tougher – if not impossible.
“For all modes of transport predicting the future with any degree of accuracy has suddenly become tougher – if not impossible”
So, it’s helpful to have some information on which to base your assumptions, and therefore your business plan.
The current situation has changed many things, and one of those is official reporting of statistics.
While economic figures are traditionally published regularly and relatively timely, the same has not been the case for other information, which can often be many months, if not years out of date (the latest drink-drive stats being a case in point – definitive 2018 figures were only published today).
There’s an old joke that having an accountant giving you information on which you base your decisions, is like driving blindfolded at 70mph on the M1 with an accountant telling you how fast you were going 10 miles ago, how much fuel you were using and how much your vehicle was depreciating by. But that doesn’t help you to know what’s coming up.
The joke’s unfair on the profession, and a switched-on pro-active accountant is a vital part of your business planning, but you get the idea…
It’s understandable that governments are reluctant to provide provisional data, as it’s subject to change when more data is received.
But COVID has prompted a sea change in this viewpoint.
Now, what’s described as “early experimental data” on the impact of the coronavirus (COVID-19) on the UK economy and society is being published weekly.
These “faster indicators” are created using “rapid response surveys, novel data sources and experimental methods.”
So, while they come with a health warning, they are better than nothing, and might well turn out to be surprisingly accurate – and therefore useful – given that they are ‘instant’ rather than subject to the usual time-lag.
The latest figures are here and there are some interesting ‘take-aways’ that the mainstream media hasn’t reported. They show that while there is a long way to go, it’s not quite as gloomy as it might first appear.
While some of the figures are based on hard facts – such as traffic information collected from automated sensors and counters – others such as business confidence are derived from surveys and represent ‘feelings’ and ‘expectations’. Not something you traditionally associate with government figures.
Some notable points are:
- In total 13% of the workforce remain on furlough leave, with 70% of furloughed employees receiving top ups from employers to their pay.
- New company incorporations are 3,393 incorporations per working day, higher than the 2,612 per working day on average the same time last year.
- There was an average of 828 voluntary dissolution applications per working day, a continued decrease from 865 in the previous week. This remains lower than the Quarter 3 2019 average of 1,008 per working day.
- Total online job adverts remained at just over half (55%) of the 2019 average for the third consecutive week.
- Overall footfall at retail locations continued to rise with retail parks increasing to 90% compared with the same day a year ago and shopping centres to just under 70%.
- All road traffic was six percentage points lower than traffic seen on the equivalent Monday in the first week of February, mainly due to reduced car traffic,
What you take away from these figures, and how you might interpret them, is always a matter for debate, but given that they are the most recent – not more than a week old – they are a useful indicator of the ‘way things are going’, shall we say?
As EnRoute founder Aviv Frenkel tells Leon Daniels in this week’s Podcast “Data is the new oil.”
Certainly, as our dependence on oil reduces, it’s clear that data has replaced it in some cases – just witness today’s spat between the Daily Mail and Apple, after Apple said its new iPhone operating system would see users having to ‘opt-in’ to be tracked by advertisers using apps.
It’s food for thought.