Tuesday, 11 August 2009

MarketViews update and the accuracy of forecasts

(By Richard Holway 3.00pm Tuesday 11th August 09) As you probably saw, we launched our MarketViews update this morning - a co-production with our partners PAC. You will also have seen that our forecasts are pretty much unchanged. UK SITS spend will decline 1.3% in 2009 vs the 1.0% decline we forecast in February.

Most of our 'competitors' have been forced to come out with a series of pretty major forecast revisions recently. They have all received publicity as evidence of a declining market. Whereas actually they were evidence of some pretty poor forecasting! We have been very proud of our forecasting history - indeed much of it since 1992 in partnership with PAC. The downturn in the UK SITS market was pretty obvious when the current crisis started almost exactly two years ago in Aug 07. Within a month we had forecast negative growth for both 2008 and 2009 and have kept with our forecast that the first evidence of an upturn in the UK SITS will not be experienced until H2 2010.

The trouble is that prophets are rarely appreciated. I sometimes feel 'the more right you are the less you are liked'. A year back, Anthony and I met with the CEO of one of the Top Ten SITS suppliers. We had one of the most 'robust' sessions I have ever known where said CEO rubbished our contention that SITS growth would follow GDP into 'negative territory'. I still remember the session because I came away feeling that we were being persuaded to change our forecast because then, by some magic, such a downturn wouldn't happen and all our futures would be saved. If only we had such power!

We are proud of our forecasting record. If we think it is going to rain, we will tell you regardless of whether this is what you want to hear. If you choose to go out without an umbrella and get wet, then 'on your head be it'.

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