This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

January 19, 2011

Glimmers of Hope

In numerous previous Herman Trend Alerts, we have discussed the tremendous influence small- and medium-size companies have on the job market in the United States. Economists tell us that up to 80 percent of job growth worldwide takes place in these types of organizations.

Two recent releases give us some hope for more job creation this year. First, we highlight a study from CBIZ Small Business Employment Index. In December, companies with fewer than 300 employees experienced employment growth of 1.54 percent, representing the largest percentage increase since June 2010.

Of the 3,099 companies surveyed, 29 percent of the respondents had added employees; on the other hand, 50.4 percent had made no changes, indicating greater employee retention and stability. In an even smaller company business survey by Intuit, employment was found to have increased in December---by 0.3 percent, or 57,000 jobs.

Compare these numbers with the Society for Human Resource Management's (SHRM) report. Polling larger companies, SHRM's Leading Indicators of National Employment (LINE) report for January 2011, showed that the percentages of American companies that reporting hiring expectations in January are at three-year highs in the manufacturing and service sectors (3.0 and 1.1 percent respectively). On top of that news, layoffs are at a four-year low.

Overall, In January, for the 15th straight month, hiring is increasing in manufacturing and services on an annualized basis of 13.3 and 6.8 percent. In these numbers, we see glimmers of hope.

Happily, Manpower and CareerBuilder forecast employment gains in the US during 2011; however no informed person is expecting a quick or dramatic reversal. The depth of unemployment is serious and it will take us years to dig out of this hole.

On the international stage, we still see the numbers looking better than the US, with Asia and South America leading the way. The phenomenal GDP growth we are seeing in China, India, Qatar, and Singapore will fuel the rise of the Middle Class, an important event for producers throughout the world and the global economy. In the US, we will also see a continued acceleration in home-shoring, as manufacturers seek higher quality and lower transportation costs.

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