Based on the last few months and as we have repeatedly mentioned, we are clearly facing a downturn when compared to the previous years. Both animal numbers seen and invoices generated have generally been just below zero – implying less has been done in those months than the same month in the previous year.
April was a terrible month with around an 8% reduction in workload, but the numbers bounced back nicely in May and were close to zero – meaning similar workload in May 2023 compared to May 2022.
The very volatile nature of the chart due to very unpredictable drops has made it difficult to understand what the months in the future will look like, but it seems that generally holiday months like December and April are having a significant reduction of work. The months immediately after then increase, perhaps a bit more than they should, because holidays have created a deferral of some work to the next month.
However, on average the animal number and invoice number have been below zero for over 12 months, either by a long way or a slight amount, so the downturn is real, with the exception of animal number in May which managed to sneak in just above zero – once again indicating the unpredictability of current times.
The green line shows quite the opposite – this is the number of consultations delivered to the current population of pets seen. This shows how the profession, when faced with a less busy environment, gets better about delivering better quality care to patients. Although we just show consultations here, the same trend exists with blood testing, hospitalisations and dentals. Our thoughts here is that the veterinary profession is fairly resistant to recessions – veterinary businesses can pivot between high volume workload to better delivery of care when the workload changes – but from our extensive data, we can see that some do it better than others.
So where are we actually seeing problems at the moment? We see very few problems as a result of the ‘business doing badly’ or the ‘business getting too quiet’. Most of the practices we service still have reasonably good profit margins. However, because interest rates have increased so significantly, most of the stress we are currently seeing is around the cost of borrowing and servicing loan repayments which historically were half the amount, particularly where business owners have committed to large personal investments in hospital builds and fit outs. Whether this is reason enough to hold off such endeavours is another aspect altogether which involves knocking back the entrepreneurial spirit (something we don’t like to do) – it may be no co-incidence that some of the best businesses that have existed were born or thrived in a recession (Disney, Microsoft, Airbnb).