2024 – a year to forget?

By Neil Cooper-Smith, senior analyst, Business Pilot.

Month-on-month figures for December follow an established seasonal pattern. You don’t need us to tell you that sales fell away in November with a 42% drop, to an average of 29 in December compared to 50, the previous month.

Leads dropped by the same percentage, from an average of 99 in November to 57 in the same period, again reflecting established patterns in seasonality.

Despite declining leads and sales, the average conversion rate slightly improved from 43.5% in November to 44.0% in December, a 0.5% increase.

Year-on-year trends are, however, more insightful, although again possibly only confirm what most of the industry has felt, that if not quite an annus horribilis, 2024 was largely a year to forget.

This shows that December was consistent with the previous 11-months, recording a year-on-year drop in sales of around 20%.

More concerning is the year-on-year drop in leads in December 2024 on 2023 – down 42%. While things have the potential to change in January, we expect this to lead to a corresponding year-on-year decline in sales next month.

More positively, we saw month-on-month growth in average order values from £3,615.21 in November to £4,245.45 in December – a 17.43% rise. This was also reflected in a year-on-year analysis, suggesting a seasonal shift to complete home replacements and continuing growth in the premium market.

So, if we gaze into our crystal ball, what do we think is on the horizon for the year head?

Well, after a slow start we expect things to pick up. The UK economy is predicted to see growth in 2025.

Inflation may still be above the Bank of England’s 2% target but if it keeps rates too high for too long, it risks tipping the economy into recession. This means economists are predicting that the interest rates will drop at least four times this year from the current 4.75%.

Analysts also predict that a mortgage price war at the beginning of this year, combined with a rush to beat the end of the stamp duty holiday, could reignite the housing market.

A rush to buy property in the first quarter of 2025, should make for a better Q2 – as long as you and your suppliers get there.

The fly in the ointment is the increase in the National Minimum Wage and National insurance, which jumps from 13.8% to 15% from April – something which could cost business as much as £2,000 for each employee.

Given tougher but improving trading conditions in January, February and March, further casualties in manufacturing and installation are likely – before things get better.

Streamlining operations and increasing visibility of your costs against this context makes sense. Business Pilot does this by giving you complete visibility across your operations while making running your business smoother and delivering a better service to your customers.

This also reduces reliance on labour, allowing you to adjust your head count over time and increase your profitability.