Last updated 14:34, Wednesday, 26 November 2008

There is a tried and tested economic barometer – local, national and global – known as the Lipstick Index. To those astute enough to stay a step or five ahead of dreaded downturn, it’s more valuable an indicator of what lies ahead than any Dow Jones or FTSE... because women drive it.

Financial institutions watch, measure and monitor the Lipstick Index closely. They’d be daft not to. Before they enquire as to the price of a barrel of crude, brace themselves for an early morning peep at the markets, read the runes on next quarter’s interest rates, they check out the sales of Estee Lauder’s Crystal Rose, Chanel’s classic Rouge Allure and any of L’Oreal’s glossy offerings... because they know we’re worth it.

When lipstick sales are on the up, guys in suits worry. They know the economy is on its way down. When we girls have a different gorgeous shade of lippy for every day of the week, a choice of a few more for evenings and still find the need to shop for more, there’s serious trouble ahead.

Unsurprisingly US lipstick sales rose by 38 percent in the first quarter of 2008. No wonder banks all over the world flew into a panic. Only a few weeks later UK and European sales figures exceeded even those in America. In next to no time at all, the index had proved true again.

For fascinating insight into a woman’s role in the fortunes of the global economy I’m grateful to a very fine lady who knows a thing or two about business, having worked in retail for most of her life and as much about lipsticks as any woman on the planet – by virtue of her gender and immaculate grooming.

“You should check out the Lipstick Index,” Marie suggested over a cappuccino in Hoopers. “It’ll tell you how important women are to the economy as a whole.”

So, I did (what on earth was life like before Google?) and there it was – page after page of Lipstick Index analysis and forecast which, had Alistair Darling thought to take a peek himself, would have sealed the case for withholding tax cuts from men and giving them all to us for the speediest possible recovery from recession.

The index works on the premise – or rather the undeniable truth – that whatever else women will give up in tough times, we will not give up our shopping trips. And even when cash is tight, loans hard to come by and unfaltering female intuition warning of the need for thrift, we won’t go home without a purchase.

While we might not find too much wisdom in splashing out on a new kitchen, living room furniture, hall carpet or even a designer label outfit, we will at least buy a lipstick to ensure we have our fix of the necessary feel-good factor retail therapy is known for.

A relatively inexpensive glamour purchase puts a little spring in our step, makes the heart pound just a little faster, warms the cockles and makes us feel good about ourselves... and we women are unbeatable when we feel good about ourselves.

The term Lipstick Index was coined by none other than Leonard Lauder himself. He, as head of the late Estée’s cosmetics group, isn’t short of a dollar or two. But then if anyone should know about women’s shopping habits, Leonard should. So he heeds the signals of the index.

He was the first to articulate the notion that lipstick sales rise when the economy is struggling because female consumers forego big-ticket items and opt for small, affordable luxuries instead. So rising lipstick sales reflect a downturn.

This indicator has been a reliable signal over the years; Estée Lauder’s lipstick sales doubled after September 11, for instance.

Of course, soaring lipstick sales aren’t the only signs of trouble ahead. Sales of body lotions, mascaras, bath oils, perfumes and scarves also give a clue. And it is said – perhaps a touch less reliably – that when women start to wear their skirts a little longer, they do so because they sense an economic downturn heading their way.

When hemlines are high, good times lie ahead; as they fall, markets follow them down. Short skirts supposedly reflect exhibitionism and thus confidence, while long ones key in with subconscious vulnerability. In the UK, hemlines have been short through most of our boom years. At autumn/winter catwalk shows skirts were worn below the knee or longer.

Men are less likely to crave the thrill of making a purchase when money is scarce. Shopping doesn’t appeal to most men as a necessary part of life in the same way as it does to we girls. In tough times they are more likely to batten down the hatches and postpone all spending than they are to trip into town for a coffee with their pals, returning home hours later with a happier heart and a bottle of after shave.

So, it stands to reason ladies that we are the natural, most instinctive fixers of a recession spreading gloom throughout the nation and giving nervous men in boardrooms, banks and cabinet offices the collywobbles.

What’s worrying these guys most, as they pace their offices in scuffed shoes and threadbare suits they think they shouldn’t splash out to replace and renew?

In the words of former US President Bill Clinton: “It’s the economy, stupid!” So come on boys, do something abut it.

If the route out of financial misery is paved with consumer courage, either nip out and buy a lipstick yourselves or hand the money over to a population of instinctive economic experts and send us out shopping. You know it makes sense.