That appears to be the big question and no one I have talked to appears to know. I look at our sales graph and it is up and down and all over the place. I really appreciate the ups even though they are few and far between. Usually from January to June we see a steady increase in activity for direct placement and supplemental needs.
Below is some research from the American Staffing Association that “may” be signaling an improvement in the economy. Their best guess is a strong fourth quarter and a slow first quarter 2010.
ASA Research Provides Recession Guidance
New ASA research released last week can help staffing firms track the economy and job growth, anticipate when the recession will end, and develop better business plans for the near term.
In examining more than 35 years of government data, ASA confirmed that changes in temporary help employment coincide with changes in gross domestic product. This relationship is particularly strong when the economy is emerging from a recession. Accordingly, a sustained upturn in staffing employment would signal the end of the recession.
ASA also analyzed quarterly employment and sales data that the association has been collecting since 1992. Models based on that data show that GDP growth of 1.2% is required to increase staffing employment, and growth of 0.8% is required to increase staffing sales. Generally, then, economic growth of 1% is necessary for staffing industry growth.
Returning to the government data, ASA analysis shows that, when the economy is emerging from a recession, changes in temporary help employment occur about three months before changes in nonfarm employment. This means that overall employment would likely begin to pick up about three months after staffing employment ticks up.
ASA offers the only tool that provides a near real-time measure of temporary help employment: the ASA Staffing Index. The index tracks weekly changes in staffing employment. Last week, ASA improved the index by cutting one week off the data lag, resulting in index reports being issued just nine days after a week has ended. The index has been flat since the beginning of the year, but when it turns up, staffing industry growth has ensued and the U.S. economy is probably emerging from the recession.
When will the recession end?
In early June, 54 economists regularly surveyed by the Wall Street Journal predicted GDP growth of 0.6% in the third quarter. But they anticipate 1.9% GDP growth in the fourth quarter�plenty to spur staffing industry growth. For 2010, they predict GDP of 2.7%.
Beware the first quarter, though: ASA data since 1992 show first-quarter employment and sales have always been down from the preceding fourth quarter.
