Ten years of writing the blog and I’ve never once mentioned the Purchasing Managers’ Index.
Let me correct that glaring oversight immediately…
First things first: what is a Purchasing Managers’ Index? Very simply put, it’s a measure of confidence in the economy. It’s expressed numerically, with any figure above 50 indicating confidence, any figure below 50 meaning that business is pessimistic about the future.
April’s PMI in the UK fell to 13.8, the lowest figure on record (by some way) and – according to the FT – it predicted a downturn ‘worse than anything seen in living memory.’ The same story was told around the world, with record lows recorded in almost every country.
And then the figures for June came out – and in the UK, the PMI jumped to 47.6 from the 30.0 recorded in May.
That was the first of several ‘good news’ stories I’ve seen from around the world this week. Toyota has chosen the UK as its export hub for the new hybrid it’s building. The UK continues to be the top country in Europe for financial services investment. The Bank of England re-affirmed its commitment to the recovery by pumping £100bn into the economy. And the (still irritatingly young) Chancellor will unveil a financial package next month, specifically designed to kick-start the economy.
In the US new home sales rebounded much more quickly than expected. The tech-based Nasdaq index hit a fifth record high this month and the President tweeted – what else? – reassuring news about a possible US/China trade deal. Economic data from Europe was similarly encouraging.
So this week my glass is very much half full.
Of course everything will not go smoothly in the future. We may well see a second spike of the virus in the UK and all of this will – at some point – have to be paid for, with the IMF estimating that the UK will end up borrowing £400bn to tackle the recession caused by the virus.
But it will only be paid for by a successful and growing economy and that means you and me, ladies and gentlemen.
Will it be business as normal? No it won’t. But that doesn’t mean we should worry, and it doesn’t mean that we cannot take advantage of the current economic and business climate.
I saw two really interesting articles on the BBC business site this week. The first suggested that a recession – and virtually every economy in the world is now in recession – was a good time to start a business.
What do General Motors, Burger King, Uber and Airbnb have in common asked the article. They were all set up in a recession and therefore are ‘tougher and more nimble’ than businesses set up in ‘easier’ times. By definition the article can only quote successful businesses set up in a recession, but the point is still valid.
We all know Nietzsche’s famous dictum: ‘That which does not destroy us makes us stronger.’ And I think that will be true of a lot of businesses and business owners. Talking to TAB colleagues – both in the UK and in other countries – I detect a sense of optimism and a determination to recover from the virus and its economic impact, and also a commitment to learn from it.
We will need to be ‘tougher and more nimble.’ We will need to question the old ways of doing things and the ‘accepted wisdom.’ Do we really need an office building? Isn’t this a chance to improve the bottom line and the work/life balance of our team?
I cannot tell you how much I’m looking forward to Board meetings over the next six months. We’ll see new ways of thinking start to emerge, as well as innovative solutions to familiar problems.
What did you mutter? And a few well-worn, grizzled faces will be covered by masks? It hadn’t even crossed my mind…
The other article on the BBC was, perhaps, indicative of those ‘innovative solutions.’ “My income disappeared so I created an online course.” We’re all going to see sources of income disappear in the ‘new normal.’ Not all our clients and customers will make it through the recession. So new sources of income are going to be high on everyone’s list. As that article illustrates, never underestimate the value of what you know.
So, despite the recession, despite the FT predictions, despite the fact that it all has to be paid for, I’m optimistic. I have absolute confidence in the people I work with, both at head office and throughout the UK. I’ve absolute confidence in the wider TAB family and it’s commitment to constantly share best practice.
And I have absolute confidence that one day we will look back and say, ‘Yes, it was tough. Yes, there were moments when the road was rocky. But we worked together – and look what we achieved.’