December 2011 Employment

MRINetwork Analysis of the BLS Employment Situation Report

October 2011 Employment

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

According to the Labor Department, 104,000 private sector jobs were added to the U.S. economy in October, while state governments were largely responsible for a loss of 24,000 positions in the public sector. Nonfarm payroll employment rose 80,000 in October and the unemployment rate fell from 9.1 to 9.0 percent. While the total job gain was lower than that of the last few months, there have been substantial upward revisions in recent months. September’s private sector gain, for example, was originally reported at 137,000 and was subsequently revised up to 191,000 in the Labor Department’s most recent report.

October’s job growth was concentrated on service-providing industries with specific gains in food service and drinking establishments, healthcare facilities, and administrative and support services. While less substantial, a gain of 10,000 general merchandise retailer positions is an additional positive indicator for an industry closely affected by consumer confidence. After significant gains in recent months, non-residential specialty trade contractor employment fell by 22,500 positions, the largest loss of any industry during the month.

The unemployment rate for those who hold a four-year college degree and higher rose sharply from 4.2 percent to 4.4 percent. While the gain is attributable to an increase in unemployed candidates – up 73,000 during the month – total employment of such degree holders also increased, albeit at a slower rate of just 20,000. The unemployment rate for those working in management, professional and related occupations fell from 4.5 to 4.4 percent year over year. Meanwhile, the unemployment rate among sales and related occupations, which spiked early in the recession, has fallen from 9.1 to 8.2 percent year over year.

A slight decline in the duration of unemployment in October may indicate a positive shift that will hopefully continue. The mean duration of unemployment fell from 40.5 to 39.4 weeks while the median fell from 22.2 weeks to 20.8. Both of these measures have been steadily rising for more than three years, and these drops pull them back to their levels of more than six months ago.

Even when factoring in continued losses in the public sector, the last three months have seen total average job gains in excess of 110,000 a month, a rate exceeding U.S. population growth. On the whole, the most recent employment measures show a labor market that is holding its own with pockets of growth, pockets of stability, but just one area of decline – the public sector, which is the only substantial source of job losses.

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

The four-year degree unemployment rate fell from 4.5 percent a year ago and 4.3 percent in August to 4.2 percent in September. The management, professional, and related occupations unemployment rate remained flat year-over-year at 4.4 percent.

Outside of telecommunications, a few sectors saw meaningful levels of growth. Commercial construction saw a jump as nonresidential building construction added 13,200 positions and nonresidential specialty trade contractors added 10,700 jobs. Additionally, heavy and civil engineering construction added 6,200 jobs for a net growth in the construction industry of 26,000 positions.

A variety of retailers saw modest employment gains, including food and beverage, health and personal care, and general merchandise stores. In total, retail trade added 13,600 positions, a relatively small gain on its 14.5 million workers, though the types of stores that are seeing gains is telling. The rate of hiring of temporary and contract labor also increased, adding 19,400 positions in September.

September’s numbers may be tepid, but they are an improvement over the general mood during much of September. They indicate an economy where companies are investing in construction and retailers of non-durable consumer goods are seeing reasons to add staff.

MRINetwork Analysis of Today’s Bureau of Labor Statistics (BLS) Report

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

According to the Labor Department, the U.S. labor market added 39,000 positions in November and the unemployment rate rose from 9.6 to 9.8 percent. The private sector added a total of 50,000 positions during the month while local governments shed a total of 14,000 jobs. Net revisions to September and October released today added an additional 38,000 positions, though that doesn’t do much to counteract the description of today’s numbers as anemic.

 
The seasonally unadjusted management, professional and related occupation unemployment rate ticked up to 4.7 percent in November, compared to 4.6 percent at the same time in 2009, while the seasonally adjusted unemployment rate for those with a Bachelor’s degree and higher rose from 4.7 to 5.1 percent. This is the highest reading for this figure since records began being kept in 1991.

The sudden jump in unemployment among the 46.3 million workers with advanced degrees, while partially a result of decreased employment, may be evidence of two other converging trends. The first is that disgruntled job seekers are regaining confidence and beginning their job searches anew. This is seen in the increase in the participation rate among advanced degree holders from 76.1 to 76.6 percent during November. When these job seekers return to the market, however, they are coming face to face with a second trend. Employers in some industries who had begun hiring again may be taking a breather, waiting to see if increases they saw in their businesses were caused by the release of pent up demand, or if they will result in a longer-term increase in volume that will last past the New Year.

On a seasonally adjusted basis, temporary help services were responsible for adding 40,000 jobs in November. The healthcare sector, which has continued to add jobs throughout the recession, added 19,000 positions in November, while retail trade shed 28,000 positions on a seasonally adjusted basis.

Today’s numbers don’t show any industry greatly adding to or subtracting from their headcounts. While retail trade lost 28,000 positions, it was out of a total of 14.4 million positions, or less than two of every 1,000 positions. In net, 39,000 jobs were added to the workforce in November, but during that same period an average of 431,000 people made new unemployment insurance claims each week. Just to break even in November, more than 1.7 million people had to get new jobs. The economy may not be adding jobs as fast as we would like it to, yet, in an economy where 1.7 million people are finding new jobs each month, it is difficult to define it as anemic.

 MRINetwork Analysis of the BLS Employment Situation Report

January 2011 Employment

 The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

This morning, the Labor Department reported that the U.S. unemployment rate fell from 9.4 to 9.0 percent in January, while 36,000 jobs were created. The private sector accounted for 50,000 new jobs, while government payrolls shed 14,000 employees, mostly at the local level. A seasonally adjusted drop in the total number of unemployed people by more than 600,000—possibly a result of winter storms discouraging job seekers—drove the unemployment rate to its lowest level since the spring of 2009. With the improving momentum of many economic indicators, including both manufacturing and non-manufacturing activity, common wisdom says participation should begin increasing, causing at least a temporary jump in the unemployment rate.

The management, professional and related occupation unemployment rate was down to 4.7 percent in January from 5.0 percent a year earlier. On a seasonally adjusted basis, 227,000 jobs were created in January for those with a Bachelor’s degree or higher and the unemployment rate for that group decreased from 4.8 to 4.2 percent. For those with a high school education or less the unemployment rate also slipped substantially, yet, at those levels, the decline was caused by the decrease in job seekers and total employment actually fell.

Revisions for all of 2010 were also released today, showing that 40,000 more jobs were added in November and December than previously reported. Revisions to earlier months, though, showed fewer jobs were added than originally thought. In net, the revisions show that just 948,000 positions were added during the year. Nearly two thirds of this growth—599,000 positions—were filled by workers with some level of college education.

 For one of the first times in more than a year, temporary staffing levels slipped—by 11,400—which indicates the private employment market actually added a total of 61,400 permanent employees in January. Construction and couriers & messaging positions were among the hardest-hit disciplines according to the Labor Department, losing 32,000 and 44,800 positions respectively. The construction decline can easily be explained by the harsh winter in January while couriers & messaging positions receded from an unusually large spike in December.

MRINetwork Analysis of the BLS Employment Situation Report

February 2011 Employment

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

This morning, the Labor Department reported that the U.S. unemployment rate fell from 9.0 to 8.9 percent in February. The private sector added 222,000 jobs, while the state and local level governments shed 30,000 positions. The gains were in line with economists’ estimates, and combined with positive revisions to the data of previous months, mark a sizable improvement in the rate of recovery to the labor market. This improvement is being strongly driven by those with four-year degrees, a segment of the population in which employment rose by 266,000 positions in February after having added 227,000 in January, a month where there were 63,000 net job gains.

The management, professional and related occupation unemployment rate fell from 4.8 to 4.4 percent year-over-year. The unemployment rate for construction and extraction related occupations—traditionally high in the winter—fell from 26.5 percent from a year ago to 22 percent this February. The sales and related occupations unemployment rate also fell from 10.2 to 9.0 percent year-over-year

By industry, job growth was well distributed with gains in several industries said to be harbingers of wider economic growth, such as construction, 33,000, durable goods manufacturing, 30,000, transportation and warehousing, 22,000, and accommodations and food service, 15,500.  Health care also continued to grow, adding 34,000 jobs during the month and nearly a quarter million jobs in the last year.

A sustained growth rate of approximately 200,000 positions per month is what the U.S. needs to make up for population gains to see a gradual, fundamental reduction in the unemployment rate.  Revisions show that in three of the last five months we have very nearly approached that level and there is every reason to expect that such growth will continue in the near term. Job growth, however, is only taking place among workers with some college and mostly those with four-year degrees and higher. For workers without any higher education, the employment picture isn’t changing as fast. Among the long-term unemployed, this barrier to entry will continue to be an issue. The average length of unemployment reached 37.1 weeks in February, an increase of 7.3 weeks from a year ago.

March 2011 Employment

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

Today, the Labor Department estimated a total of 216,000 jobs were added to the U.S. economy during the month of March, beating economists’ estimates of 185,000. The unemployment rate ticked down from 8.9 percent the previous month to 8.8 percent. Job growth continued to be broad-based, with positions being added across most major industry groups. Public sector employment, however, declined by 16,000, led by job losses at the city and county government levels.

March’s employment report showed an increased number of labor market re-entrants over recent months, especially among those with higher levels of education. While there was an increase of 255,000 jobs among those holding a Bachelor’s or higher, there was also an increase in the size of that workforce (employed and unemployed, but looking) of 328,000 people. To date, however, the pace of people re-entering the job market has not been large enough to prevent the unemployment rate from continuing to fall.

While the vast majority of jobs being added are now permanent—in contrast to 2010—employers continue to add contract positions as well. March saw staffing firms add 28,800 temporary positions during the month for a total of 2.3 million, or 2.1 percent of the total U.S. workforce.

The management, professional, and related occupation unemployment rate fell year-over-year from 4.7 to 4.3 percent in March. While still at a historically high level, its rate of decline to a more typical level is accelerating. In December, it was flat year-over-year, but by January, it was down 0.3 percent and by February, it was down 0.4 percent.

Total labor market growth seems to be stabilizing at a pace that will cause the unemployment rate to decline. In fact, the current level of private sector job growth, over 200,000 per month, is above average for most non-recession periods. Between 2004 and 2007, the U.S. private sector added, on average, just 169,000 jobs per month.

April 2011 Employment

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

This morning, the Labor Department reported that 244,000 jobs were created in April. It was the single largest monthly gain in more than a year and the third consecutive month of job growth in excess of 200,000. The U.S. unemployment rate rose from 8.8 to 9 percent, a result of increased participation in the job market. This increase is likely a sign of improved employee confidence that is often seen on the tail end of employment downturns. While the total number of people unemployed during the month increased by 205,000, that growth came from job market reentrants and those who left jobs voluntarily. The total number of people unemployed because of job loss actually decreased by 65,000.

Job growth in recent months has come from highly skilled positions, with employment increases occurring almost entirely among those with four-year college degrees. April, however, saw a sudden reversal in this trend as growth showed a broader base. In fact, the largest increase in employment in April was among those with nothing more than a high school diploma.

This is understandable considering the growth of positions in department stores, bars and restaurants and amusement, gambling and recreational facilities –– all businesses known for having workers with less advanced education. In essence, job growth started with highly skilled and educated workers late last year. Now, the nearly 700,000 college-degreed individuals who have started jobs since January have begun to spend money at these establishments, sparking this hiring trend.

In aggregate, though, those with four-year degrees continued to experience an unemployment rate nearly half that of those without any college experience. Similarly, the management, professional, and related occupation unemployment rate fell from 4.5 percent a year ago to 4.0 percent in April. Additionally, employment at temporary staffing agencies remained mostly unchanged during the month, indicating that job growth was entirely made up of permanent positions.

The median duration of unemployment ticked down a full week to 20.7 weeks in April. If employment growth continues among industries requiring less skilled labor, those positions are more likely to be filled by people with longer durations of unemployment. While many facets of the labor market have seen gradual improvement, the length of unemployment and the size of the long-term unemployed population have only just begun to budge. Improvements in these two metrics may be the final trailing indicators of the labor market’s recovery.

MRINetwork Analysis of the BLS Employment Situation Report

May 2011 Employment

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

This morning, the Labor Department reported U.S. unemployment rose from 9 to 9.1 percent in May while adding 54,000 non-farm jobs. Local governments shed 28,000 positions during the month while private industry added 83,000. The federal and state governments combined to cut just 1,000 positions during the month.

Professional and technical services added the lion’s share of positions, tacking on 40,000 new jobs — most notably in accounting and bookkeeping (+17,800) and computer systems design and related services (+8,200). Temporary help services were mostly unchanged. The remaining job gains mostly came from health care (+27,200) which has added jobs throughout the recession.  Other sectors experienced very mild growth or losses, most so small as to be not statistically significant.

The management, professional, and related occupations unemployment rate fell from 4.5 to 4.4 percent year over year while the four-year degree unemployment rate was down from 4.4 to 4.3 percent over the same period.

These numbers are an aberration from what has been seen since the beginning of the year, yet they seem to be supported by other recent readings. The Purchasing Managers’ Index fell from 60.4 to 53.5 percent in May and the ADP Employment Report saw job growth fall from 177,000 in April to 38,000 in May. These other reports make it impossible to dismiss the Labor Department’s figures. However, there is reason to think May was an exception, and not a change in momentum.

Some economists point to the supply chain disruptions resulting from March’s Japanese earthquake and tsunami hitting U.S. manufacturing in May.  The Manufacturing sector lost 5,000 jobs during the month—not a significant decrease from the 11.7 million person manufacturing workforce—its first loss in six months.  After today’s numbers, the U.S. remains on track to add between 1.5 and 2 million jobs during the year in total. With the disaster in Japan, continued skittishness in Europe over sovereign debts and heated unrest in the Middle East, May’s modest growth seems more an indicator of the resilience, rather than the fragility, of the U.S. economy.

MRINetwork Analysis of the BLS Employment Situation Report

July 2011 Employment

The full report can be seen here: http://www.bls.gov/news.release/empsit.htm.

The Labor Department has reported a gain of 117,000 jobs in the United States during the month of July, the largest gain since April. Additionally, the unemployment rate dropped a tenth of a point to 9.1 percent, its first decline since March. During the month, private employers added 154,000 jobs while state and local government shed nearly 37,000 positions. While still slower than the rate of population growth in the U.S.—150,000 a month over the last year—July’s gains were significantly more positive than many observers were expecting after Thursday’s 500-point drop in the Dow Jones Industrial Average.

The unemployment rate for those holding a Bachelor’s degree or higher fell to 4.3 percent in July while the management, professional and related occupation rate remained flat year-over-year at 5 percent. The average length of unemployment, however, continued to trend upward, reaching more than 40 weeks. Prior to 2009, the average length of unemployment had only twice exceeded 20 weeks since records started being kept in 1948.

Across industries, job gains and losses were insignificant, with some exceptions. Motor vehicle manufacturing added 12,000 jobs and mining support activities added 8,400. Ambulatory healthcare services added 14,100 positions, while hospitals added another 14,000. Administrative and support services, excluding temporary staffing firms, posted 12,200 new jobs in July, while temporary staffing firms added just 300.

June’s deeply disappointing 18,000-job gain was revised to a gain of 46,000, and May’s gain of 25,000 was revised to 53,000. Between July’s gains and revisions to previous months, job growth appears mildly stronger than had been thought after last month’s report. Initial unemployment claims have also trended downward over the last few weeks, falling by 22,000 from July 16 to July 30. Yet, total claims, just like total unemployment, remains at record highs—further highlighting that, while total employment continues to grow, its growth remains slow.

Featured Article

Notable Global Events  

Spotlight on the Middle East & North Africa

A Year After the Arab Spring 

Spotlight on Washington, D.C.

  Featured Article 

Economic Outlook is Modest, with a Chance for Surprise 

           Notable Global Events  

   In November, a rising unemployment rate in Australia began to decelerate while its manufacturing index in December showed expansion for the first time in six months. While the country never entered recession, the last half of 2011 saw a substantial slow down.

German unemployment has managed to continue to fall for more than two and a half years, reaching 5.5 percent in October. It is one of the few bright spots in the EU labor market where total unemployment has risen to 9.8 in October, its highest point since the global downturn began.

  Spotlight on the Middle East & North Africa

  Spotlight on Washington, D.C.  

December 2011

• • • • • • • • • • • • • • • • • 

Employment Summary

• Europe
• Asia & Australia
• Americas

Spotlight on Latin America

Region Proves Ready for More Stable Growth 

Spotlight on Washington

 

• • • • • • • • • • • • • • • • • • • • • • • • • • • 

“You would be hard pressed to find a company that has managed long-term growth without investment. That investment normally needs to begin with human capital. After a deep recession that affects people at every level, trying to expand through increasing workloads can be counterproductive as employees are pushed past their tipping point, leading to increased turnover.” 

Rob Romaine
President of MRINetwork 

     
Employment Summary  

Europe 

In October, unemployment across the EA17 and EU27 hit new high levels making clear it had reversed course from a slide in unemployment rates throughout 2010. In the EU27, the unemployment rate reached 9.8 per cent, exceeding a 9.7 per cent unemployment rate in early 2010 while the EA17 unemployment rate reached 10.3 per cent, rising above 10.2 per cent in early 2010. The rise came with increasing unemployment throughout most of Europe with the only significant exception, Germany seeing its unemployment rate falling from 5.7 to 5.5 per cent from September to October.

 

Continued euro area debt issues have taken European consumer confidence to a two-year low, slipping to 93.7 per cent and many economists expect the continent’s economy to slip into contraction during the fourth quarter.  The Swiss Secretariat for the Economy recently revised down its estimates for 2012 GDP growth from 0.9 per cent to 0.5 per cent. Some economists have projected Swiss unemployment, currently 3 per cent, could rise as high as 3.9 percent before the end of 2012.

 

    

Asia and Australia

 

After a significant drop in Japanese unemployment in September, unemployment rebounded 0.4 per cent in October. The new rate, 4.5 per cent is still in line with pre-tsunami unemployment rates. By the end of the year, Japan’s economy is expected to contract by 0.2 per cent before beginning to grow again in the new year by 2 per cent. 

 

Several Korean industry think tanks have projected a slowing global economy will raise South Korean unemployment from 3.5 to 3.7 per cent. As the European debt situation continues to deteriorate casting a shadow on the global economy, Korean’s central bank has recently lowered its 2012 GDP growth estimates from 4.6 to 3.7 per cent.

 

In Australia, a recent surge in unemployment seems to have decelerated in November with the unemployment trend flat between October and December and with a slight uptick in total employment, 4,200 people.

    

Americas

 

The United States unemployment rate fell rapidly from 9 per cent in October to 8.6 per cent in November, its lowest rate in more than two years. Much of the decline, however, was driven by discouraged job seekers suspending their job search, ostensibly, as the long term unemployed decided to take time off during the holiday. Total employment grew by 120,000 positions month-over-month.

 

Unemployment in Canada rose from 7.1 per cent to 7.4 per cent, however, many economists see it as a short term change of direction. Recent surveys have shown that while employers will remain cautious during the first quarter, they intend to be continue hiring. 

 

 

  Spotlight on Latin America  

 

   Region Proves Ready for More Stable Growth 

As the world has undergone the worst global recession since at least the Great Depression, Latin America’s economy has moved almost in the opposite direction. This has really just been the extension of nearly two decades of improvement in the quality of life in the region.  

Over the last few years, extraction of natural resources, including coal and precious metals, from throughout Central and South America has helped to fuel those economies while their North American and European trading partners entered recession.

Brazil alone has become a leading provider of iron ore, gold, and natural gas, selling much of its products to Asia. But the influx of cash into the Brazilian economy while the world was still in recession put Brazil on a dangerous path toward inflation. The Brazilian Central Bank tried to tighten available credit by raising its benchmark SELIC interest rate as high as 12.5 per cent. While the bank states it would like to see a 4.5 per cent rate of inflation, it is expected to end 2011 with a rate of nearly 6.5 per cent.

Now, the economy has started to slow, and it is estimated to grow just 3.1 per cent in 2012 while meeting its 4.5 per cent inflation target. The slowing economy has caused the bank to reverse course in recent months, cutting the SELIC 100 basis points since August in the hope of giving the economy a “soft landing.” Other Latin American countries that had also been raising interest rates have stopped in recent months, and are now considering cuts as well.

Latin America has seen its fair share of hyperinflation over the last few decades. Should monetary policy continue to succeed as it appears to be, this could help to relieve many of the negative stereotypes about Latin American economies, allowing for more confident foreign investment.”

Argentina, Chile, Brazil, Bolivia and Peru all saw hyperinflation in the 1970s, 80s, and 90s. In 1990, Brazil’s annual rate of inflation rose more than 30,000 per cent and didn’t reach a comparably tame 16 per cent growth rate until 1996.

Latin America is well-positioned to become the economic powerhouse of the 21st century with a combined GDP of more than 6 trillion US dollars. If Latin America were a unified economy, it would be the fourth largest behind the U.S., the EU and China. But unlike China, Latin America remains mineral-rich, and unlike the EU, it has only two predominant languages.

Multiple Latin American countries have seen their currency risk hyperinflation, but a successful recovery will change the way companies look at doing business in Latin America. A more stable path going into the next decade will mean substantial rewards for companies who enter the marketplace and gain market share today. 

 

  Spotlight on Washington State

   

  Diverse Industries Show Strength, Set Stage for Growth

Foundational technology, military, biotech, alcohol; there are not many industries as fundamentally in demand as these – and all four have a growing presence in Washington State.  Seattle is the birthplace of modern computing as much as Silicon Valley ever was.  But while Silicon Valley is most well-known for cranking out high-flying, consumer-facing technology, Seattle has a more subdued record of producing technology products that have deeply engrained customers.

Microsoft may not be around forever, but with 94 per cent of new computers each year being shipped with the Windows operating system, the Redmond-based software behemoth isn’t going anywhere soon. Seattle’s own Amazon.com, which started as a simple online bookstore, has exploded as an online retailer of just about anything imaginable, and now provides the backbone for an immeasurable number of both retail and technology companies.

But as Len Holmes, managing partner of The Lakewood Group, an MRINetwork affiliate outside Tacoma, notes, technology is just one slice of Washington State’s growing pie.

As part of the 2005 Base Realignment and Closure Commission’s plan, Washington became home to one of the first U.S. military bases under the joint jurisdiction of both the Army and the Air Force. Joint Base Lewis-McChord combines two once-neighboring bases and shares their resources. The joint base is able to find efficiencies, theoretically reducing its economic impact. Units, equipment, and personnel from nearby closed military bases have been relocating to Lewis-McChord, providing a strong economic boon to the region.

While the state’s biotechnology firms may be outshone to a degree by its consumer technology companies, that industry added more than $10 billion to the economy in 2010 and managed to grow its workforce nearly 9 per cent from the beginning of the recession in 2007 to the first quarter of 2011.

“Lingering questions over the state of healthcare legislation have recently put a damper on Washington’s enthusiastic biotechnology growth – specifically in the medical devices sector,” says Holmes, “Companies are being cautious about adding headcount as long as uncertainty remains.”

Yet, such companies aren’t seeing their businesses shrink. In fact, they are holding onto cash that could fuel rapid growth once the industry’s future becomes clearer.

Rounding out the state’s economic diversity is a rapidly growing wine business. Over the last two decades, the total acreage devoted to wine making has grown from 11,100 acres to more than 40,000, while the number of wineries grew from less than 80 to more than 700. In fact, nearly 200 new wineries have opened in Washington State since the beginning of the recession.

“There are some very bright spots in Washington’s economy right now, but overall I don’t think we are feeling that buzz yet,” notes Holmes. “What we are seeing is a strong foundation of diverse sectors which are continuing to survive. Once the national economy picks up speed, they will be able to feed off of each other to start building again.”

 

November 2011

• • • • • • • • • • • • • • • • • 

Featured ArticleBreaking an Unbreakable Cycle  

Notable Global Events  

Spotlight on The Netherlands

Country Weathered the Worst of Downturn 

Spotlight on California High-Tech and Energy Industries Strong in a State Still Steeped in Recession

• • • • • • • • • • • • • • • • • • • • • • • • • • • 

They’re finding new opportunities in the job market. As the economy picks up, the need for experienced professionals is greater, says John Fulcher, director of healthcare at MRINetwork’s Bauer Consulting Group Inc., an El Paso health-care recruiter. “We are seeing the need for more seasoned professionals who require less ramp-up time and are able to make a larger impact in a shorter amount of time,” Fulcher said in April. 

John Fulcher, Bauer Consulting GroupAs quoted on SecondAct.com 

  Featured Article 

September 30, 2011

Breaking an Unbreakable Cycle

During the third quarter, U.S. GDP grew at an annualized rate of 2.5 percent, reducing fears of a double dip recession for now. In August, there were more than 4 million hiring events. That equates to 3.1 percent of the total U.S. workforce getting a new job.  In September, the unemployment rate for those with a four-year degree fell to 4.2 percent and the unemployment rate for those who most recently worked in a management, professional or related occupation was just 4.4 percent.

That is good news for a lot of people—namely those with jobs in fields that require specialized experience and education. But there are also nearly 14 million jobless Americans who want and are searching for a job. The average duration of unemployment now exceeds 40 weeks, excluding those who have taken part-time work or given up searching.

“The country emerged from recession more than two years ago,” says Rob Romaine, president of MRINetwork. “The stock market has in large part returned and corporate earnings are at record highs, but everyone—both consumers and companies—are behaving as if we are still in a recession. Consumers continue to delay purchases and companies are choosing to sit on record amounts of cash rather than invest in resources and human capital.”

To be saving cash in uncertain times makes perfect sense on the individual level. However when looking at the country as a whole, it means hundreds of billions of dollars less in spending and the spending which does occur is at significantly lower profit margins.

“High unemployment doesn’t benefit anyone. As long as spending remains anemic, employment levels will fail to rise significantly, and those who have been out of work for more than a few months are likely to remain out of work for even longer,” says Romaine. “But in a classic catch-22, spending is going to remain weak as long as unemployment is high.”

Like any vicious cycle, this one needs to be broken. Yet, nothing will happen overnight and it might not be possible for there to be one bold action from the government or one strong economic signal from the economy to fix everything.

“This cycle will be broken on the individual level. Individual companies will look at their business and say, ‘despite the macroeconomic outlook, our business is sound and we need to invest to make it better,’” says Romaine. “Unemployed individuals will also have to dig deep and reevaluate what kind of career and lifestyle they are willing to accept.”

For someone who hasn’t found a job after 40 weeks of searching, their prospects aren’t going to change because of a simple resume tweak. Most long-term unemployed are going to have gain additional skills while lowering their salary or title expectations more than they ever thought possible to rejoin the workforce. Yet, these are the individual sacrifices which will break the cycle.

“Coming out of this there hasn’t been and there won’t be a ribbon-cutting moment, just a long series of small decisions that will slowly turn the tide,” says Romaine. “Companies who don’t invest in talent and resources will lag the recovery cycle and eventually fall behind their competition.”

  Notable Global Events 

The Chinese Government has passed legislation requiring foreign workers and their employers to contribute to a social security fund beginning in the New Year. However, details on the benefits those employees could collect, like unemployment and pensions, are unclear.

Growth in some Latin American countries seems to have slowed, allaying concerns of rising inflation. The Chilean Central Bank recently considered cutting its 5.25 percent key interest rate, though, it has chosen to delay that decision for another quarter.

  Spotlight on The Netherlands  

Country Weathered the Worst of Downturn  

The Netherlands is a relatively small country—about twice the size of New Jersey—yet it is an economic powerhouse by many measures. Its 4.4 percent unemployment rate is one of the lowest in the euro area, second only to Austria’s 3.7 percent rate.

Leading into the recent decline, the Netherlands had 26 years of uninterrupted growth. Nearly 75 percent of its half-trillion euro economy is tied to trade with Europe and other partners throughout the world. As a result, when the global economy slowed, total exports shrank by as much as 25 percent, yet total GDP shrank by only 3.9 percent.

“The Netherlands is a particularly well-suited crossroads for Europe. While that means the economy is deeply affected by the global economy, we also have a flexible resilience,” says Jean (JJJ) Theuns, president of MR Human Capital Group, an MRINetwork affiliate in the Netherlands. “The greatest infrastructure of our economy is a highly educated, skilled workforce, and that has remained flexible through the last several decades.”

Perhaps most important for the economy’s long-term outlook, though, is not low unemployment among Dutch professionals, but among the country’s youth. Youth unemployment, which has been blamed for many of the social disruptions that have occurred across North Africa, Europe and now the United States, has remained particularly low in the Netherlands. While the average youth unemployment rate in the EU is 20.9 percent, and 46.2 percent in Spain, the Dutch unemployment rate for those under 25 is just 7.5 percent.

Social policies led by Dutch employment minister Paul de Krom have been focused on keeping young people employed, or if not employed, in some form of education or training. Funding through the Youth Employment Action Plan, though, is running out, and the government has also begun looking to cut emergency expenditures.

In 2012, the Netherlands is expecting to see a GDP budget deficit of 3 percent, though the country’s current total debt burden has already surpassed 60 percent.

The Netherlands may soon be running out of options. It may be necessary in the near future to cut the very services and programs that have minimized the effects of the financial crises and may have been just enough to get the country through the very worst.

The Netherlands and the rest of the world seem to be through the worst of the recession. Should positive trends in the U.S. and Europe continue, government stimulus in the Netherlands will peter out just as organic economic activity begins to take its place.

  Spotlight on California

High-Tech and Energy Industries Strong in a State Still Steeped in Recession

If you want to find a state devastated by the economic downturn, there is nowhere better to look than California. House prices plummeted as much as 70 percent in some markets, construction stopped still, and foreclosures cascaded up and down the state. Peaking at 12.5 percent a year ago, its unemployment rate has been second only to Nevada for much of the last year and unlike many high unemployment states that saw substantial pull-backs early this year; California has fallen only to 11.9 percent.

However, at least in Northern California, some changes seem to be on the horizon, according to Eric Wheel, managing partner of PrincetonOne – Northern California, an MRINetwork affiliate.

“Going into this year there was high demand in only the narrowest of specialties, especially at high-tech firms,” says Wheel. “Over the last several months we’ve seen those narrow bands begin to open and a wider range of positions at a broader range of companies become available. Even marketing and administrative positions are seeing increased demand.”

While demand is increasing, employers are finding that qualified talent is difficult to come by.

“The talent supply for the types of positions we deal in—requiring professional, college-educated candidates—is much more shallow than employers expect, no matter how much they may have been warned,” says Wheel. “Yet, firms that find the right candidates still remain cautious and are implementing extended interview processes.”

Also in Northern California, Karl Dinse, managing partner of Management Recruiters of Sacramento, says he has seen marked improvement among industries related to power generation—both conventional and alternative.

“The demand for talent across all types of energy production in California remains strong, from design and construction to operations. Even solar, despite the very public collapse of Solyndra, remains not just viable but growing strong and searching for experienced talent,” says Dinse.

A recent report by Ernst & Young suggests that large-scale solar projects could become competitive with conventional energy sources within the decade. The majority of the country’s 24,000-megawatts of production currently in planning or construction is in California.

Despite its position at the epicenter of two of the most thriving industries in the country today, California is far from being out of the woods due to its deep-rooted public finance and foreclosure issues, not to mention the stifling unemployment rate.

OCTOBER 2011

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• • • • • • • • • • • • • • • • • • • • • • • • • • • 

Economic Growth Stays Fractured 

GDP is an easy way to look at the economy; it’s one number, it’s positive or it’s negative, it’s a series that goes back 70 years. In the second quarter of 2011, for example, U.S. GDP grew by 1.3 percent. However, no one has been hired or fired—outside of politics—because of GDP. One industry could double in revenue, while another could halve its revenues resulting in massive hiring and layoffs, yet, GDP would remain flat.  

 

That is one of the reasons post-recession job growth is often led by small and medium-sized companies. A small credit union in St. Louis can notice an increase in qualified commercial credit inquires, ramp up their capacity to sell and service those loans and get the business before the national banks even see the trend.

“Many larger companies are getting back that agility through the use of contract labor—side by side with permanent staff—not just to fill one or two critical roles or test candidates, but rather to fill out entire departments and capabilities,” says Romaine. “One of the biggest advantages a smaller company can have is the ability to affect rapid change in its workforce. The use of contract labor helps medium and large-sized companies regain the advantage by adding back that flexibility.”

Not only is there less risk should positions become unnecessary, contract positions can often be filled with significantly less HR process. Should the role become permanent, the employees are already in place, making the onboarding process little more than a technicality.

When the advance estimate for 2011 Q3 GDP is released at the end of October, it will give us a better idea of the direction of our economy as a whole, and whether another recession is possible. However, business leaders who are looking for clues about where their company or industry is heading should look a little closer to home.

Notable Global Events

    The German Parliament has approved a $287 billion loan guarantee which will help to shore up the financial situation of a number of euro zone members, including Greece. Though still not a final solution, the guarantee gives Europe more breathing room.

Government officials in the UAE are beginning to discuss introducing some form of unemployment insurance which would cover guest workers. Current UAE law mandates companies pay severance at the end of service, though employees are unprotected from employers unable to make good on that payment.

OCTOBER 2011

• • • • • • • • • • • • • • • • • 

Global Employment Numbers 

Spotlight on Japan

Country Rebuilds and Carries On 

Spotlight on Ohio

     Global Employment Numbers  

Europe

 

                     Spotlight on Japan

           Country Rebuilds and Carries On

Great economic growth hasn’t been a staple of the Japanese economy for more than a decade and a half. To call Japan’s economic situation a recession, though, is a misnomer. In the 20 years prior to the March 11 earthquake, tsunami, and nuclear disaster on the archipelago, GDP grew an average of 0.8 per cent annually. Yet, during that time the unemployment rate never exceeded 6 per cent and has often been under 5 percent.

An economy in Japan’s position is often said to be on the edge, waiting for just one disaster to push it over into an economic free fall. Instead, Japan experienced three disasters at once, and six months later, the country was for the most part back to business as usual.

“Technically we are in recession, but people have jobs, they drive nice cars, they live in nice homes and, while people do suffer, it’s not disproportionate—it doesn’t feel like a recession. If anything, Japan is stable,” says North Compton, an MRINetwork business development director in Japan.

The idea that an economy can be stable and have only marginal growth runs contrary to much of modern economic thought. Yet, it is working and the resilience of Japan after multiple disasters that were devastating to both life and infrastructure seems to further highlight this.

In February, Japan’s unemployment rate reached 4.6 per cent, its lowest rate in more than two years. Then, after March 11, it jumped to 4.9 per cent, only to return to 4.6 per cent by the summer.

“It’s not accurate to say that the disasters haven’t affected the labor market, but the biggest effects have been somewhat unexpected,” says Compton. “For example, one issue we’ve experienced is that some professionals, in mid-career, are reevaluating their priorities after March 11 and deciding it’s time to try something new with their lives.”

Such a reaction isn’t uncommon in the United States or Europe, but in Japan’s culture of lifetime employment, professionals in senior positions rarely leave their jobs. When there are vacancies in senior positions, there is not a large Japanese candidate pool to recruit from at the mid-career level.

Another effect has been on companies that heavily use expats. Since the earthquake, many of those expats have relocated to other countries throughout Asia, working remotely and waiting for a return to normal.

“No one blames expats for leaving, and only half a year later companies aren’t yet putting significant pressure on them to return,” say Compton. “That’s likely not going to change substantially until we reach the one year anniversary, but it’s also not going to last forever.”

Working remotely, Compton notes, is perhaps one of the most substantial changes to come to the Japanese workforce since March 11. Power concerns throughout the northern half of the country have mostly abated, but this is in part because of aggressive power savings by the entire population. Many companies, long resistant to a remote workforce, have actively encouraged employees to work from home to save power. Fears of rolling blackouts during the hot summer in Tokyo never came to fruition.

“Few countries on earth have been so repeatedly struck with such severe knockout blows and yet have been able to both recover and even reinvent so quickly,” says Compton. “It’s a testament to both Japan’s people and its culture.”  

          Spotlight on Ohio  

Like much of the rest of the country, Ohio has two very different situations for those with and those without college degrees. Since Ohio residents have a below-average rate of bachelor degrees, its unemployment rate has floated higher than the U.S. average for most of the last decade.

There are two levels of employment here,’’ says Jeff Noble, CEO of Management Recruiters of Dayton. “You don’t need a degree for the hourly jobs that exist, but we’ve seen a vast reduction in those types of opportunities.”  

“On the other end of the spectrum where we work, without a degree I can’t help you. If you don’t have a degree, the client company isn’t even going to be interested. And they often require even a master’s on top of a bachelor’s degree,” Noble says.

For those with degrees, the situation has improved. In fact, over the last year, Ohio’s unemployment rate continued to fall while the national employment rate’s decline had stalled.

“If you take a look six months ago at the average company in northeastern Ohio, you might see one or two openings,” says Robert Boal, president and general manager of Management Recruiters of Cleveland-Southwest. “If you look today, you’re going to find 10, 15, 20 openings.”

Openings, however, don’t always turn into new jobs. In fact, as both Boal and Noble note, those openings often have requirements attached to them that screen out many, if not all, of the available candidates, causing these positions to remain open.

The industries with the largest job gains have been education, health services, and professional and business services—all sectors that frequently require not only college degrees, but often advanced degrees.

That job growth, and presumably candidate demand, are focused on such employees. This may be why improvement in Ohio’s unemployment has reversed over the last few months. It still has a way to go, however, its unemployment rate is still on par with the U.S.

Employment Summary     

• Europe
• Asia & Australia
• The Americas

Spotlight on Kuwait    

Stability in an Unstable World      

Spotlight on Tennessee

• • • • • • • • • • • • • • • • • • • • • • • • • • •     

“The depth and length of the downturn forced organisations to make structural changes which have sent productivity to record heights. Today, in a period where market growth often remains minimal, the most direct way to create the earnings improvements investors are looking for is to push for further efficiencies.”      

  Employment Summary    

The most recently reported unemployment rate in the United Kingdom, April’s 7.7 per cent, was the first increase in unemployment since the addition of austerity measures earlier in the year including layoffs of public sector workers and a sharp rise in the value added tax.    

Asia and Australia     

The employment market in Japan seems, at least according to the numbers, to have hardly been affected by March’s devastating earthquake and tsunami.  Unemployment in June ticked up from 4.5 to 4.6 per cent, its same rate as February 2011. Australia’s unemployment rate jumped from 4.9 to 5.1 per cent in July, while total employment growth has slowed substantially over the last six months. In fact, seasonally adjusted, the total size of Australia’s 11.5 million person employed workforce, shrunk by 100 people in July. In Hong Kong, during the three month period ending in June, the unemployment rate remained at 3.5 per cent, while the underemployment rate fell from 1.9 to 1.8 per cent.     

The Americas    

Total employment in the United States grew by 117,000 positions in July, while the unemployment rate fell from 9.2 to 9.1 per cent. The growth of employment, while more than many expected, was not enough to offset population growth and the drop in the unemployment rate was actually caused by discouraged job hunters putting their search on hold. U.S. professional employment, however, remained much lower, just 5 per cent and 4.3 per cent for those workers who held at least a four-year college degree.    

Argentina saw its unemployment rate fall to 7.3 per cent in the second quarter, down from 7.4 per cent in the first quarter of the year. Recently, the economy has been growing steadily with strong consumer and government spending paired with rising exports.  

Spotlight on Kuwait   

Stability In an Unstable World  

While the “Arab Spring” swept across most of North Africa and the Middle East, Kuwait has wildly avoided the unrest, likely in large part because of its low unemployment rate — at just 1.64 per cent, one of the lowest unemployment rates in the world — and an economy that continues to boom. 

In a region of the world synonymous with instability, Kuwait has amassed an uncommonly strong foundation. While 92 per cent of the government’s income comes from oil, which is a notoriously volatile source of income, the annual budget has run a surplus of over 10 per cent since 1999, reaching as high as 21 per cent in the past year.   

A recent IMF report highlighted the need for tax reforms in the country, including introducing a value-added tax and a comprehensive income tax system.  Such reforms would increase the government’s non-oil revenues and help ease such taxes into the public consciousness before more substantial taxes are actually necessary.      

The IMF report also called for increased investment in infrastructure projects to create economic engines beyond just banking and oil extraction — a sentiment echoed by many government officials.     

“Increased infrastructure spending will obviously contribute to more immediate construction projects for Kuwaiti workers, but they will also lead to a more substantive range of economic opportunities for our many college graduates,” notes Zoqout.    

With more than 13 per cent of all public expenditure going towards education, Kuwait has the highest-rated education system of the Arab world, according to UNESCO. The literacy rate in Kuwait, amongst men and women combined, is 93 per cent, also one of the highest in the region.     

“Of course the future is always unknown, but it’s hard to consider our current outlook to be anything but bright,” says Zoqout. “Unemployment is low, our financial position is strong, the government is open and stable, and there is a flow of bright, educated young professionals ready and eager to grow our economy further.”       

    Spotlight on Tennessee 

 Manufacturing Drives Slowly Recovering Economy

Like many parts of the country, the southern state of Tennessee has struggled with the recent economic downturn but things look like they might be turning around for the “Volunteer State.” 

“Manufacturing is probably the strongest sector in Tennessee,” Al Clark, general manager of Management Recruiters of Chattanooga-Brainerd says. “We’re finding that the manufacturing base that we work with in the state tends to be growing across the board. Though it’s not fast growth, there is improved demand in that market.”   

In Tennessee, one of the most important manufacturing sectors is the automotive industry. Indeed, the Volkswagen Group of America, Chattanooga Operations, recently celebrated the third anniversary of building a $1 billion factory in Tennessee, which will soon employ more than 2,000 workers. 

Clark notes that these factories do more than merely employ people, as they have a positive ripple effect on the rest of the state’s economy. 

“When you’re talking about a company like Volkswagen building a billion dollar plant, you’re not just talking about the company,” Clark continues. “All of their suppliers also come in. That impacts manufacturing and it impacts construction.” 

In addition, Nissan recently announced that it would begin making the motor for its electric vehicle, the LEAF, at its Decherd power train assembly plant.     

While things have begun to look up in the Volunteer State, the fact remains that Tennessee’s unemployment rate for June was 9.8 per cent, higher than the nation’s rate of 9.2 per cent.    

Clark says that a great deal of the lost jobs are coming from government payrolls, as many agencies are contracting amid the downturn. He also noted that the job creation efforts of private employers have not been able to keep up with the loss of public jobs.    

“Like with most areas of the country, we’re seeing the local and state government contracting and the private sector is not replacing those particular jobs as fast,” notes Clark. “We are absolutely not able to keep pace with the way that the governments and school systems are cutting [jobs].”    

According to Clark, the future of the economy in Tennessee is still up in the air as the nation continues to struggle with its debt and businesses are unsure of what course Washington will take. Regardless, he said that he believes energy, technology and service will be among the biggest industries in the state in the coming decade.             

SEPTEMBER 2011

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Featured ArticleTurnover Leads to Opportunities  

Notable Global Events  

Spotlight on United Kingdom

An Abundance of Caution Slows Economy 

Spotlight on Illinois Agriculture Provides Stability in Downturn

• • • • • • • • • • • • • • • • • • • • • • • • • • • 

Even with the unemployment rate unchanged at 9 percent, Jason Breault, managing director of LifeWork Search has noticed an increased level of confidence in his candidates. “This year we have seen candidates finally taking control of their growth potential, leveraging frustrations in their current roles and taking advantage of the opening job market. Many employees feel they have hit a wall in their current roles, yet at the same time have been pushed harder, putting in longer hours, and taking on more responsibility without being properly compensated.” 

Jason Breault, LifeWork Search an MRINetwork Affiliate

   Featured Article  

As quoted in Supply & Demand Chain Executive

August 12, 2011

Turnover Leads to Opportunities 

Looking at an unemployment rate that has been stuck at more than 9 percent for over two years, it would stand to reason that the employment market is static. Little more than 100,000 jobs are being added each month to an economy that employs more than 130 million people.  

Yet, the labor market is far from static. Total employment in the United States is turning over at a rate of more than 3 percent per month. That means each month, more than 4 million people start a new job and more than 2 million people voluntarily leave their job. This may seem like taking one step forward while taking one step back, and in terms of lowering overall U.S. unemployment, it is.

At the same time, every month, 4 million hiring managers are looking at their businesses and the economy and deciding they would be better off hiring someone. But when they make that decision, it’s not about just replacing a warm body; it’s an opportunity to change the direction of their workforce.

“A few years back, when someone resigned, HR pulled out the old job description and started to replace them. Now when that same person leaves, a manager’s first thought is more likely to be, ‘How should this role change,’” says Rob Romaine, president of MRINetwork. “At a time when many departments have a difficult time adding positions, reexamining every job description as it opens up can be the lowest friction way to reshape a workforce and with proper planning, large changes can happen relatively quickly.”

In the professional and business services sector the monthly turnover rate is closer to 5 percent, which means that with a clear workforce plan in place, a company’s entire focus can be altered in less than two years.

“Backfill workforce planning requires more foresight than just eliminating one position, while adding another. However, it maintains the continuity of business operations, lowers separation costs, and avoids potential morale or public relations issues,” notes Romaine.

In a backfill workforce plan, the target for where the organization is heading needs to be defined, but the path on how to get there must remain dynamic—changing based both on which positions open up, and what candidates are available. The plan itself should be less about creating a pre-defined organizational chart and more about the capabilities and capacity of the target organization.

“When someone leaves the company, you start by looking at what capabilities that person had which are required immediately,” says Romaine. “Then you can work with a search consultant to understand what talent is currently available to fit your basic requirements and which additional capabilities of the target organization you may be able to include in the role.”

Working with an experienced industry-specific search consultant can bring needed expertise to both formulating and implementing a backfill workforce plan. Since they work with candidates in an industry every day they will not only understand the capabilities that are available—both active and passive—they can be searching for and building relationships with candidates before you actually need them.

“Redefining positions as they open up can lead to only the priorities of the day being addressed,” notes Romaine. “Working with a search consultant to create a workforce plan with a long-term horizon makes larger, more substantive changes possible.”

Notable Global Events  

China’s manufacturing index rose from 49.3 to 49.8 in August in a preliminary reading. The figure still indicates a contracting manufacturing sector in China, but at a very slow and improving rate.

GDP growth estimates for Latin America were recently cut by Morgan Stanley, from 4.6 to 3.6 percent across the region, indicating a deceleration of what was seen as a dangerously overheated economy. By mid-2012, economists project Brazil will begin cutting its benchmark interest rate, the SELIC, from its current 12.5 percent which was set to help slow the economy. 

Spotlight on United Kingdom

 An Abundance of Caution Slows Economy 

When riots broke out across England—first in the Tottenham section of London, then in other cities throughout the country—the blame was widespread. Some attributed the spark of the riots to government austerity measures including cuts to education; others noted the high youth unemployment—which has resulted in other civil disturbances in Europe and the Middle East over the last year. In a very literal sense, though, the riots started after Mark Duggan, an alleged drug dealer and gang member, was shot and killed during an attempted arrest.

“I think the riots and looting were opportunistic and little more than that,” says Sandra Hill, managing partner of The Hill Group, an MRINetwork affiliate in Manchester. “The economic situation throughout the UK is difficult, but the riots have given it a more desperate appearance than is actually justified.”

Current estimates show that the UK’s gross domestic product grew by 0.2 percent during the second quarter of 2011, down from 0.5 percent growth during the first quarter. Some have attributed the slowdown to an increase in the value added tax early in the year. Yet, as Hill notes, shopping centers are staying full and British residents are taking more vacations this year than in the last several.

While confidence may be returning for workers who currently hold positions, confidence has not returned to the labor market as a whole.

“Candidates’ primary concern in changing roles today is job security,” says Hill. “Candidates are highly reluctant to explore opportunities—it often takes three or four requests before a passive candidate will even provide a CV. When recruiting today, our most important job is to sell the stability of the company. We have to highlight their financials, show that they are on solid ground, or that it is investing heavily in R&D.”

Considering that actively recruited candidates are dragging their feet, it’s no wonder that very few qualified candidates are applying for posted positions. Once a candidate is found, though, risk-averse companies are delaying the hiring process further.

“Employers are conducting more extensive background checks and vetting candidates to a greater degree than ever before.  More people want to be involved in the hiring process and companies’ attitudes are closely tied to short-term market factors,” says Hill. “The mid-August equity market turmoil caused many firms to reevaluate their hiring plans, some going as far as re-reviewing every open position.”

“Despite all the rightful concerns both businesses and employees have, we see green shoots,” says Hill. “The UK auto industry is supposed to be in horrible shape, yet, one of the largest English auto companies is currently adding more than 1,200 positions to its UK operations this year. While the aerospace industry is also said to be in a slump, the Paris Air Show in June was one of the most successful ever for Airbus.”

“There is an abundance of caution in the market,” says Hill. “It is slowing things down, perhaps prolonging the downturn. However, in the end it is just caution. As business continues to be conducted, the necessary confidence will begin to return.”

  Spotlight on Illinois

 Agriculture Provides Stability in Downturn  

Like most of the country, the unemployment rate has remained stubbornly high in Illinois since the recession’s end. While it fell to 8.7 percent this spring, it edged back up to 9.5 percent in July. Some of the largest job losses have been in the government, leisure and hospitality, and construction sectors; many of them in Chicago and its outlying suburbs. Once you leave the Chicago metropolitan area, however, a different economy exists. 

“Downstate Illinois has a vital agricultural industry, and some significant manufacturing,” says Craig Ahlstrom, president of Perfect World Search, an MRINetwork affiliate in Peoria. “Peoria, specifically, is an important medical hub, with three major hospitals, a branch of the University of Illinois School of Medicine, and related health-services businesses.” 

As a whole, the economy in downstate Illinois is blended – some sectors are thriving, others are not doing so well.  While some manufacturing companies have voiced interest in relocating to open-shop states, agriculture has become one of the most stable segments of the Illinois rural economy.

Nearly 20 percent of all U.S. exports come from agriculture, and Illinois is one of the largest providers of those exports, leading to a robust industry in the state. Nearly 80 percent of the state’s total land area is covered by farms.

The ancillary services that keep these agricultural operations up and running range from the manufacture of heavy-duty farm equipment, fertilizer products, development and distribution of hybrid seeds, and food processing are all tethered to the soil.  Like in most industries throughout the country, they are seeing a growing demand for talented professionals.

“During the downturn, companies cut deep—often far deeper than they should have,” notes Ahlstrom. “Today, many are reversing course, and are beginning to add to their workforce again.  However, companies are being highly selective about new hires, adding resources in a carefully managed process as they move toward recovery.”

Like much of the rest of the country, rural Illinois’ best opportunity to bring down its unemployment rate will be through new business openings and innovation. A hopeful sign Ahlstrom has observed from real estate agents in the Peoria area is an uptick in the commercial real estate market they serve.

“Smaller manufacturers that scaled back to nearly skeleton crews during the recession are now able to start hiring again,” notes Ahlstrom. “Providing these companies have not scaled back their physical work space, they are likely to have the capacity to ramp up production quickly and economically. Using temporary contract staff also keeps costs in line and mitigates risk should demand fall again.”

In central and western Illinois, like many rural areas across the country, the recession hasn’t made as much of an impact as the longer-term economic shifts that have affected many cities across America. In Illinois, that trend may be at last starting to change course as corn and soy prices remain high, global demand continues to grow.