Planning for the future and surveying the past

Mike Exon takes a look at the new design industry trend survey published by the Design Business Association in collaboration with David Jebb & Associates

What can we tell about the state of the design industry from a trawl of consultancy predictions? It’s a very hard question to answer.

It would depend, of course, on many things, such as how informed are the forecasters, how realistic have their past predictions been and how much are their forecasts based on experience rather than towing the general line?

Last week’s survey by the Design Business Association, in collaboration with David Jebb & Associates, attempts to gauge the impact of the economic downturn on the design and branding sector using just such consultancy predictions. Needless to say, it makes for fairly sombre reading. But its relevance is unclear.

The report relies upon questionnaires completed by 85 design groups in October. These groups are from all disciplines and are primarily located in London, though individual consultancies are not identified. Questions are largely subjective, so hard and fast units of measure are absent.

In order to deal with those intangible things – opinions – a complicated system of weighted indexing has been used. In short, a score balance of zero indicates no average change has occurred or is expected to. Similarly, a positive balance indicates an increase and a negative balance denotes a decrease is either expected, or has been experienced.

While this system doesn’t allow us to make percentage comparisons, it serves to give an indication of the relative mood of each design discipline and of groups according to their size. Because this is the first time this survey has been done with DBA members, however, the results have been compared to DJA’s own figures for 2000. This means that like-for-like comparisons are hard to draw.

Twelve months ago, the majority of consultancies were satisfied that their workloads had been ‘normal’ for six months. Now, though, a significant majority (of 23 points using the index system) believes that workloads have been ‘below normal’ since March.

In October 2000 the six-month workload outlook was very positive. Among surveyed groups, there was a considerable (31 point) balance which believed that workloads would increase over the following six months. Twelve months on and that has changed dramatically. Predictions have reversed and perceptions of the future are not good.

The trend survey reveals that respondents were significantly less optimistic about the general situation in the design sector than they were three months ago. Incidentally, last year DJA’s figures reported significant optimism about said ‘general situation’. The contrast is hardly surprising after 11 September.

The real question is, what does all this tell us? Probably nobody in the land would argue that consultancies are more optimistic about the future now than they were 12 months ago. So, the question is, how much is this pessimism the result of actual circumstance (workloads decreasing) and how much is speculation based upon who knows what?

One problem is that design consultancies are rarely objective about their futures in public. When business is running fine there is a general enthusiasm or bullishness among design groups. What should we make of this behaviour? In harder times does the reverse situation apply?

Unfortunately, it is very hard to know these figures’ significance given their subjective nature. Perhaps, as the DBA is at pains to point out, the situation on the ground is different to the picture painted by these expectations. A DBA footnote stresses that these ‘concerns about the future are in marked contrast to informal reports that many design groups are still very busy’.

The acid test will be to compare the same forecasters’ predictions in three months’ time, (which DJA already does for subscribers of its Design Business Performance Ratios). Evidence of a sustained upward revision of forecasts would be one of the truly significant findings a survey like this could reveal. Then again, it might not be.

Key findings

. Significant reversal in business optimism (-46 points compared to +26 points)

. Findings are in marked contrast to informal reports

. Groups with 20 to 49 staff were least pessimistic about the general situation over the past three months.

. Groups with ten to 19 staff were most pessimistic

. The biggest negative effect on workloads was expected among larger groups with 50 or more staff

. Groups with one to nine and 20 to 49 staff had better than average workload expectations

. The most optimistic discipline was product design, while the least optimistic was packaging design then branding

. A wide difference in performance was reported between similar sized consultancies of the same discipline

Consultancy forecast indicators
Balance Oct 2001 Balance Oct 2000 12 month change
Are you more or less optimistic than you were three months ago -46 points +226 points -72 points about the situation within the design sector?
Excluding seasonal variations, how has your workload changed -23 points +2 points -25 points during the past six months?
Excluding seasonal variations, how do you anticipate your -36 points 31 points -67 points workload will change during the next six months?
During the next six months do you anticipate that the number of +4 points +42 points -38 points permanent staff employed by your consultancy will change?
During the next six months how do you believe the level of your -19 points -24 points 5 points consultancy’s spend on freelances will change?
Source: Oct/Nov 2001, DBA/DJA Trend Survey

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