GALA’s Member Pulse Survey Results, Second Quarter 2012: Economic Indicators
06 June 2012
After stagnating in the second half of 2011, growth for GALA members in most regions of the world rebounded in the past three months. The growth was especially apparent in North and South America. True to macro-economic indicators, European members did shows signs of less growth than other regions, but there were hopeful signs in that region as well.
While growth and demand have not jumped dramatically, the overall trajectory continues to track positively for localization companies worldwide. In fact, only in Europe were there signs of decline in the past three months. Yet even in that region, growth did continue.
Demand for Service and Products
More than 78 percent of members worldwide reported that in the last three months demand for their services either grew or stayed the same when compared to the previous quarter. The number who reported an overall increase in demand slipped back under 50 percent, to 45 percent, after being above 50 percent for all of 2011. But a full 33 percent of respondents saw no change in demand and the percentage who saw a reduction in demand decreased from 22 percent at the end of 2011 to 19 percent this quarter.
When viewed regionally, the facts change significantly. All members who responded from North America and South America reported either an increase in demand (71 percent and 88 percent respectively), or demand that stayed the same (29 percent and 13 percent respectively). South American members are showing significant growth, just as they did in the fourth quarter of 2011.
Meanwhile, the decrease in demand is concentrated in Europe. In that region, 28 percent reported decrease in demand in the last three months, almost the same as in the fourth quarter of 2011 (29 percent). Forty percent saw no change at all. But the number who saw an increase was almost 30 percent less than any other region, standing at 28 percent. In fact, if Europe were taken out of the worldwide numbers, the increase in demand globally would be stronger than it has been since the third quarter of 2009.
Responses to the survey question “In the last three months, have you noticed a difference in demand for your language services or language tools that you can attribute to the economy?”
NOTE: In 2012, data collection was shifted from a quarterly schedule to a semi-annual schedule.
Members continue to be optimistic about growth. In fact, while actual demand throughout the last year grew slowly, anticipation of upcoming growth continues at a fast pace. For the first time since the second quarter of 2010, more than 70 percent of members (73 percent) worldwide expect an increase in demand in the next three months. Those who are concerned about a dip in demand for services fell to 8 percent. The gap between anticipated growth and anticipated decline (65 percent) is the biggest it has been since the first quarter of 2009 when, in reverse, 8 percent expected growth and 77 percent anticipated a decline.
Regionally, the numbers belie news reports of further decline in Europe. Only 10 percent of respondents from Europe fear ‘somewhat reduced’ demand, while 16 percent envision no change and a full 66 percent expect an increase. Asia and South America are particularly optimistic with no members expecting a decline.
Responses to the survey question “What demand do you anticipate in the next three months compared to the last three months?”
Hiring and Layoffs
Members continue to hire at the same pace shown at the end of last year. Sixty-three percent of those who responded said that they had hired new workers in the past three months, which is close to the 65 percent at the end of 2011. As with some of the other economic views, the difference between Europe and the rest of the world was striking. All regions outside of Europe reported hiring at 88 percent or higher—93 percent in North America and 100 percent in Middle East/Africa. Asia, where only one quarter of respondents indicated hiring at the end of 2011, was a particular bright spot with 89 percent hiring. Europe, on the other hand, was the only region where the percentage of respondents who were not hiring (57 percent) was greater than the percentage of those who were (43 percent).
Importantly, employee numbers have also climbed higher, indicating growth in new positions and bigger teams. Of those who hired, 72 percent said their employee numbers have increased.
Meanwhile, respondents reporting layoffs decreased to 7 percent with only a small number of European (10 percent) and North American (7 percent) respondents saying they have let go of workers.
Growth in Revenues
After a dip in revenues at the end of 2011, numbers looked much better for the last three months. Forty-eight percent of respondents saw an increase in revenues. While that number is still under the high of 53 percent one year ago, it does indicate a long-term upward trajectory since the third quarter of 2009, when only 18 percent saw positive revenues. Importantly, only 13 percent indicated a decrease in revenues—the lowest number since we began tracking revenues in the second quarter of 2009.
The growth of revenues is more significant when viewed regionally. Every respondent from every region outside of Europe showed either an increase of revenues or revenues that stayed the same. The greatest growth came from North America where a full 64 percent experienced revenue growth; 14 percent had growth of more than 50 percent. Europe was the only region where some respondents saw a decrease in revenues in the last three months. In Europe, one-fifth of respondents saw a decrease, but even there more people reported an increase (36 percent).
Responses to the survey question “In the last three months, my revenues have increased, decreased, or stayed the same.”
The GALA member pulse survey tracks industry economic measures from the past three months. Previously distributed every quarter, the survey is now semi-annual. This quarter approximately 31 percent of GALA’s membership completed the survey.
Members may download the complete survey results.