Are Americans spending their way to a better economy? While economic indicators have been mixed during the last few years, some economists are optimistic that the signs are there that the nation may pull out of its current status of stagnation.
According to the Bureau of Economic Analysis, consumer spending—which accounts for roughly 70 percent of the U.S. economy—increased 0.9 percent in March of this year. It’s the biggest gain since August 2009 and is ahead of economists’ projections of a 0.6 percent increase. Hiring has been taking baby steps forward as well, and as more Americans attain sustainable levels of employment, consumer spending can only move forward.
Increased consumer spending, of course, means more customers and a greater need for customer support, leaving contact center service providers optimistic.
“In April, the U.S. added 288,000 new jobs as the unemployment rate fell to 6.3 percent, the lowest level since 2008,” said Rick Johnson, acting president of 3C Contact Services, in a statement. “The encouraging numbers came on the same day the Federal Reserve said the economy was also picking up after the harsh winter.”
The news has also been better for the Canadian economy, which will mean better things for the already-strong North American contact center industry. The Canadian economy has been predicted to grow 2.5 percent this year and 2.75 percent in 2015.
“Increased economic activity in both Canada and the U.S. is a boon for the customer service industry,” Johnson added. “The expected growth will lead to more job openings as more and more consumers need product and service support.”
Greater need for customer support—already a hot industry in North America—will mean stronger demand for call center solutions. As the economy has lagged, many customer support organizations have attempted to limp through the downtime with outdated legacy equipment that isn’t allowing them to service customers the way customers expect. As the economy improves, many call centers will seek to play catch-up with their technology, putting in place more modern solutions that allow them to service mobile customers, monitor and interact via social media and implement more in-demand channels of customer support such as Web chat.
Many of these new solutions will be cloud-based as companies seek to replace premise-based systems with cloud solutions, seeking the scalability, flexibility and cost-effectiveness the cloud can provide. Analyst group IDC (News - Alert) recently found that U.S. spending on hosted contact center services was $1.1 billion in 2013 and will increase at a compound annual growth rate (CAGR) of nearly 12 percent to $2 billion in 2018. On-demand (cloud) contact center services hit $733.3 million in 2013, and this figure will increase at a CAGR of 17.5 percent to $1.6 billion in 2018, says IDC.
As economic indicators improve and customers open their wallets more, these numbers will likely only improve. Good news for any company that offers products and service in the call center solutions marketplace.
Edited by Alisen Downey