With large parts of the country still in the doldrums or indeed continuing to slowly slide backwards, (for example, Northern Ireland), talk of a crash is premature in the extreme – a market has to recover and presumably overheat before it can suffer such an event.
To be fair, on closer examination, that’s not quite what was being said- apparently, a crash might occur in two, three or four years’ time and then it is only one of two possible outcomes – the other being higher inflation – so to my mind, that’s at least 6 scenarios?
You wouldn’t want to make an ‘on the nose’ gamble based on that information – at best a spread betting flutter. And therein lies the challenge with opinion like this – bold statements generate PR but need to be examined forensically if businesses are to derive any real benefit from them. If one bets on number six on a roulette table over and over again, eventually, you will be right.
I recall that perhaps 10 years ago, as a business we would spend in excess of £10,000 a year to receive regular market updates and forecasts from one of these commentators. Initially, our management team felt very grown up receiving the data and making significant business decisions based on the wisdom therein.
We then moved to a phase of questioning the predictions as they regularly conflicted with our on the ground experience and instinct for the direction of travel. Finally, the monthly pack was relegated to the bin after we concluded it was about as helpful as reading Mystic Meg’s column for business planning purposes.
Whatever business you are in, the chances are you already have the data available to describe your own market ‘in house’ and the experience to interpret it.
For example, if your business volumes have grown by 5% for five months in a row, it’s not a great stretch to think that might happen next month – unless something has changed that could affect that. The Mortgage Market Review may be a case in point later this year, or equally losing a good member of staff may also have an effect. So use the past as a predictor of the future and then vary the trend based on sensible assumptions – it’s easier that some would have you believe.
Richard Sexton is director of business development at e.surv
