When companies brief us, we always ask how business is going. These days, the table is turned, and companies are increasingly asking us, “How’s business in general for the industry?” In some recent conversations with LSPs, we have probed for feedback about the unrelenting flow of bad economic news and how — or if — it is affecting their businesses.Thus far, most of the news coming from the language services industry seems to be positive. We don’t want to sound like Polyannas — the economic situation is dire for many — but we have some good tidings to share. First, the results from our latest Global Business Confidence Survey (see “Business as Usual for Language Industry, So Far,” which is available only to members and respondents of the survey) were mostly positive, although there was a drop in expected demand among some respondents.  Second, we have collected a few examples of good news from around the industry:

• Lionbridge annouced its third-quarter results, showing a small profit on US$114.3 million in revenue. CEO Rory Cowan mentioned in the conference call to investors that its exposure to the industries affected by the crisis was minimal and that he didn’t expect the company’s numbers to suffer. He also said that Lionbridge’s clients realize that their foreign buyers will not suddenly start speaking English just because the economy isn’t good: They will still need translations. From Microsoft we learned that Lionbridge was chosen from among 17,200 suppliers to be its 2008 Vendor of the Year. This award bodes well for the whole localization industry, because it puts in evidence a service that contributes to the bottom line of global companies.
• Thebigword is rapidly expanding its business in the U.S. CEO Larry Gould told us that the company has “banished the use of the terms recession, depression, slump, downturn, decline, credit crunch, reduced economic activity, and urged all employees to start challenging anyone who refers to the R word from this moment forward.” This is the right attitude for a company that claims to create a quote every 100 seconds in one of its offices around the world and to be the first non-U.S. LSP to be approved to work for the U.S. government.
• TransPerfect told us that it’s on track to reach its goal of US$200 million in revenue by year-end, up 28 percent over 2007. Several sectors showed particularly gratifying growth over the same period last year, including technology. VP Hans Fenstermacher said that “It’s too early to say what overall effect the economic downturn will have as we head into 2009, but we’re cautiously optimistic, acting prudently, and investing to position ourselves well for the future.”
• George Rimalower, of ISI in Los Angeles, tells us that business keeps growing and that he expects it to grow even more when SB853 goes into effect in January 2009. SB853 requires health care services plans in California to provide their enrollees with access to language assistance in obtaining health care services.
• Doris Albisser, CEO of CLS Communication, a company that specializes in the downtrodden financial industry, told us that contrary to conventional wisdom, the crisis actually generates more translations than usual. How? M&A activity, bankruptcies, and lawsuits increase in times of economic turmoil.
• Several telephone interpreting companies — such as Language Line Services, Language Services Associates, and Pacific Interpreters — have been reporting similar positive results. When customers need to refinance their mortgages, request payment plans, and explore other financing options, they spend more time on the phone with lenders. Over-the-phone interpretation companies working in the financial industry have not reported any slowdown. On the contrary, they tell us that business looks quite good from where they stand. Also, TI providers deriving a significant portion of their revenue from health care do not yet appear to be affected by the grim reports from Wall Street.

These examples reflect just a few of many conversations we have had with clients in Europe and the Americas. Companies frequently mention growth rates ranging from 20 to 40 percent over the past year, and their major cause of concern related to the current financial situation is that their customers are taking longer to pay. So, manage your receivables and invest in your business. Growth might not be as aggressive as in the past few years, but will still be there for many LSPs.

Granted, most of the anecdotal reports we’ve heard are based on trailing indicator data. The real question on many LSPs’ minds is this: With so many companies making cutbacks, will there still be enough money left for translation, localization, and interpreting services? When firms like Sun Microsystems make major announcements about the high-technology sector that are counterbalanced by positive results from Hewlett-Packard, it is difficult to gauge the effects on the language services industry.  Because translation often sits at the end of the supply chain, it usually feels  the ripple effect later rather than sooner. Meanwhile, we’ll continue to measure and report on the health of the business.