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Business jet takeoffs and landings were down 18 percent in August.
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updated 10/22/2008 4:49:10 PM ET 2008-10-22T20:49:10

Nelson Villanova doesn't need to watch the stock market indexes, the TED spread, or gross domestic product to gauge the health of the economy. He just has to look down. If he sees scuffed shoes, then he knows things are bad.

Villanova, general manager of Eddie's Shoe Repair in New York's Grand Central Terminal, has seen business drop 25 percent to 30 percent since August. The 15-year-old company employs 40 people across five locations in the sprawling train station, shining and repairing shoes and luggage. But lately, selling $4 shines seems to be as hard as unloading mortgage-backed securities.

The condition of commuters' shoes is just one signal of the financial crisis rippling through the business world. Other indicators emerged even before the market meltdown began in September: This summer FedEx shipped 10 percent fewer overnight envelopes than last summer. Business jet takeoffs and landings were down 18 percent in August. And office-supply sales have dropped every month since December 2007.

Though not all are based on hard data, subtle bellwethers can help take the temperature of business activity and offer a look into what businesspeople are thinking. In Manhattan, the epicenter of the financial crisis, small firms like Eddie's Shoe Repair that cater to the business elite often serve as the proverbial canaries in the coal mine.

Major Market Indices

At Andrew's Ties, a Madison Avenue-shop that sells handmade Italian silk neckties that range from $49 to $99, sales began to drop off in March, the month Bear Stearns collapsed, says Yannis Tselepidis, the store's general manager. "It's a different business now," he says. "They are more price-conscious." Some customers who would normally buy six or seven ties walk out instead with just three, Tselepidis says.

That newfound thrift — even among those who buy $99 ties — is a common theme, as companies and businesspeople alike look to cut spending. Large corporate art buyers have cut back over the past 12 to 18 months on new pieces to adorn lobbies and office corridors, says Michael Ingbar, owner of MFI Art Company in New York. "If they're laying off people, they're not going to buy art," he says.

At Fancy Cleaners, a chain of seven retail dry cleaners in Manhattan, sales are flat at most locations, says general manager Damon Bae. But at the company's bulk cleaning center on 126th Street in Harlem, he has seen big increases in customers dropping off bags with several weeks' worth of dry cleaning for the discount rate of $3.50 per item. "Everyone has an idea that every little bit helps if they can save an extra buck or two," Bae says.

Other indicators around the country reveal an atmosphere that is more cautious but hardly as dire as dramatic headlines might suggest. Business travel is down, conference calling is up. Most software makers haven't seen much of a dip, according to a survey of 50 vendors conducted in mid-October by Capterra, a business-to-business software database. "Software by its nature is designed to increase profitability," says Capterra President Michael Ortner. Companies that have spent months planning new software buys have not canceled out of panic, he says.

Even beyond the essentials, some businesses haven't felt the downturn yet. Glorious Food, an upscale New York caterer, hasn't had any planned events canceled, says partner Sean Driscoll. He says plenty of people are curious about how his business is doing. "They look at me as a barometer," Driscoll says. "Right now everything is steady."

But if there are corners of the business world where the downturn hasn't manifested yet, the shift underway is undeniable. At Eventbrite, a San Francisco company that handles online registration for thousands of conferences and events a month, marketing director Jack Mardack has noticed less interest in large, formal, industry-wide conferences. Instead, people seem to be gravitating to local events that tend to be more social. "It's almost like, whatever else happens, we're going to party," Mardack says. For example, networking nights priced under $100 — often with drinks included — tend to hit a sweet spot, he says. And attendees don't even have to shine their shoes.

Copyright © 2012 Bloomberg L.P.All rights reserved.

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