From fewer shoe shines to a slowdown in corporate art purchases, subtle bellwethers can help take the temperature of business activity.
Nelson Villanova doesn’t need to watch the stock market indexes…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% to 30% 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 $4 shines seems to be as hard as unloading mortgage-backed securities.
[…] [***John Tozzi, “How to Tell Business Is Cutting Back,” Bloomberg BusinessWeek, October 21, 2008, accessed June 28, 2011,http://www.businessweek.com/smallbiz/content/oct2008/sb20081020_372369.htm?c han=top$+$news_top+news+index+-+temp_small+ business.***]
***Figure 4.21 "A Decrease in Demand for Shoeshines" shows the shoeshine market. Traders working on Wall Street started purchasing fewer shoeshines. This was not because shoeshines became more expensive. Rather, it was a shift in the demand for shoeshines because these traders saw that their incomes were decreasing.
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