GALA Pulse Survey Results - Q2 2021
Q2 has brought a theme of growth for language service and technology providers. GALA Pulse Survey results show that respondents are not seeing much decrease in demand or revenue, or even that things are staying mostly the same: we’re still seeing growth quarter over quarter. We also noticed a few shifts in patterns this time around. Typically, business trends in North America and Europe are aligned, but this past quarter it seemed North and Latin America were more closely positioned. Interestingly, there were similar responses among both the largest and the smallest LSPs. Though their differences might be great, it appears they have comparable predictions for Q3. Additionally, sectors and services that have been middle-of-the pack until now are showing some outlying statistics – this time around it's not just the usual suspects. 117 industry insiders weighed-in with their responses to the GALA Pulse Survey.
Growth in the Past Quarter
Demand was up from last year, but only slightly up from last quarter. Merely 10% of respondents reported decreases, the fewest since Q1 2020. Overall, companies headquartered in Asia did better than the past five quarters, with a third reporting dramatic growth. Those in the USD $10-25 million range and with 50-199 employees were untouchable, with no decreased demand. Companies with 25-49 employees fared worst, perhaps due to pressure on small to medium-sized businesses. Staffing, and Tools and Technology Development reported booming business, while Translation as a service fared the worst. Financial Services were in the hottest demand, followed by Media and Technology. Gaming and Professional Services saw deep increases.
Revenue in that last quarter was about on-par with Q4 2020, with most reporting moderate gains. Although companies headquartered in Asia reported the decline than other areas, at least 60% of every region reported revenue growth. North American-based organizations reported the most stability at a third noting no change in business since our last survey. Some good news for small orgs: those with 1-25 employees had most dramatic revenue gains, with one in five reporting a 30% or more increase. Organizations with an annual revenue of USD $10+ million reported no revenue loss in Q2. Life Sciences saw the biggest revenue gains for a change, while Financial Services were the most stable. Staffing, Tools and Technology Development, and Multimedia Localization reported the best revenues. Those in Gaming, Aerospace and Defense revealed some losses.
85% of poll-takers report implementing measures to scale-up, the same as last quarter. This is happening mostly in the form of new hires (which has exceeded Q4 2020 numbers) and adding additional products and services to LSP offerings. According to the survey results, we can expect investment in new technology and increased marketing budgets.
A record 78% of companies reported that they are not cutting costs at this time (compare that to 12% last year). Of ones that are, the primary tactic is still limiting travel expenses. We have seen that Staffing services are strong this quarter, which tracks with the fact that very few organizations report that they are currently making layoffs.
In the Next Quarter…
Predicted demand over the next three months is about the same as last time: mostly increases. Only those headquartered in the Americas anticipate some downturn going into Q3: Latin America suspects some losses, followed by Northern America. While medium-sized companies hope for the most dramatic increases, small and large staff organizations are less optimistic. Interpreting and Translation services suppose there will be some modest decline, while those in Education and Training are optimistic. Companies that serve the Legal industry predict slight decreases, while Gaming, Aerospace and Defense are hoping for deep gains.
Revenue expectations are higher than ever for next quarter, with nearly one in four expecting growth. That prediction might not be too far off considering nearly 70% saw revenue go up in Q2. North American companies are looking for biggest gains, while Asian and Latin American companies expect at least some decreases. Those with staff of 100-200 employees expect the highest increases going into Q3, unlike both smaller and larger LSPs. Those in Tools and Tech Development and Staffing suspect no decreases, but folks in Interpreting are less optimistic.
Despite these steady gains, the overall mood is actually not as good as last quarter. Perhaps there is some rebound letdown? As far as strategic changes, more organizations are staying the course, and the fewest percentage ever are looking at big changes, especially for those in Asia, perhaps signaling some stability. Of the LSPs that are looking to make big changes, they are mostly mid-sized organizations, those headquartered in the Americas, as well as companies in Staffing and Aerospace and Defense. What does this mean in practical terms? We are seeing more mergers and acquisitions every day, could these results be an indicator of what is to come?
All responses to this survey were anonymous. The survey was open to both GALA members and non-members alike. Specific number of responses varied per question. Only LSP and language technology company responses were analyzed. Annual revenue and other demographics were self-reported.