GALA's Member Pulse Survey, Third Quarter 2009
10 October 2009
Industry still suffers from recession, but demand shows signs of recovery.
The Economic Picture
We have been asking members about the impact of the economic downturn for over a year now. Initially, back in the second quarter of 2008, we referred to the issue impacting North America, and most respondents replied that they were not feeling the effects. But as the downturn became more global, and large multinationals cut back on expenses, the language services industry began to feel the pain.
This quarter, the effects are still evident with a full three quarters of respondents saying their businesses are directly impacted by the downturn. That number is down slightly from the second quarter —three percentage points— but is still significantly higher than the 59 percent who reported an impact in the first quarter. Interestingly, regionally the numbers have shifted. While in the second quarter, European and Asian respondents were negatively impacted, those numbers are now decreasing (from 83 percent to 76 percent in Europe; and, from 85 percent to 62 percent in Asia). However, more North American respondents have been directly impacted this quarter (up from 55 percent in the second quarter to 75 percent this quarter).
An encouraging find was the increase in demand over the past three months and anticipated demand for the next three months. While 79 percent reported a somewhat reduced or greatly reduced demand for services in the second quarter, that number dropped to 65 percent this past quarter with 18 percent actually recording an increase in demand (up from nine percent one quarter before).
Yet compared to last year, these numbers are humbling. In September 2008, just before the global downturn accelerated, 86 percent of member respondents reported a significant increase in work volume compared to the year before.
Another positive finding was that a robust number of members—47 percent—plan to hire within the next three months. That number is slightly up from 44 percent in the second quarter when the worst of the downturn was being felt. Yet again compared to one year ago, when the industry was not yet influenced by the recession, the hiring numbers are still off: At that time, a staggering 78 percent of member respondents reported expanding their workforce in the past year.
Language Services Evaluated
This quarter we also revisited general questions about the business of language services and the makeup of the GALA membership. Results were comparable to one year ago.
In terms of geographic regions, 57 percent of this quarter’s respondents are headquartered in Europe, 16 percent from Asia, 12 percent from South America, 11 percent from North America and 4 percent from the Middle East and Africa.
As for the size of companies, measured by number of full-time employees reported in this survey, North America and Asian member companies claim the largest staffs. In Asia, 44 percent reported 25 – 49 employees, and 38 percent have 50 or more employees; In North America those numbers are 46 percent and 27 percent respectively.
Other interesting findings include:
- Fifty-one percent of respondents indicated their companies have been in business more than ten years; this number is down from 60 percent last year.
- Most GALA member companies identify themselves as multi-language vendors (66 percent), which is comparable to numbers from last year. Likewise, a full 41 percent accommodate more than 10 language pairs. In fact, 44 percent report handling more language pairs than one year ago.
Finally, we asked members to share their stories about the languages they serve. Language service providers do, by nature, get involved in some interesting projects, and it was fascinating to learn about some of them. Stories include the member company that serves the Irish Refugee Legal Services, helping refugees with translations from over 50 languages, and another member working on an English to Marshallese project hindered by hurricanes and other major storms. Even an official ‘dead’ language was mentioned by a member who did a German to Latin project.
The complete results of the third quarter member survey, including percentage increases in net profits and revenues, are available for member companies to download at this link.
The third quarter survey was completed by 100 GALA member companies. Respondents were spread across all geographical regions with the most coming from Europe. The association began conducting quarterly surveys of its members last year in an attempt to increase the overall industry knowledge base, and it will continue to focus surveys on information our members want to know.