Hiring Outlook Cautiously Optimistic

December 18, 2006
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GRAND RAPIDS — Construction, non-durable goods manufacturing, and finance, insurance and real estate companies are expected to lead the modest job growth predicted for the Grand Rapids area in the latest Manpower Employment Outlook Survey.

The survey revealed that for the first quarter of 2007, 20 percent of area firms expect to add staff, 10 percent expect reductions, and the rest will be unchanged.

Housing starts are down by 21 percent through October in KentCounty, according to Judy Barnes, executive vice president and CEO of the Home & Building Association of Greater Grand Rapids. Job growth in the construction industry is coming in the commercial sector, said John Doherty, president and CEO of Associated Builders & Contractors.

“The greatest impact will be in commercial construction,” Doherty said. “Residential is pretty flat and the expectations are for that to stay that way for a while. Commercial construction is going to see steady increases in 2007.”

He attributed the construction job prospects to the health care sector and development in downtown Grand Rapids

Rob Umstead, president of the Michigan Association of Insurance Agents and an agent at Steenland Insurance in Walker, said he thinks hiring in the insurance industry is waiting for the rest of the Michigan economy to pick up.

“Right now, we’re in a soft insurance cycle,” Umstead said. “The capacity is out there to write business, but there’s a lot of competition out there. Companies are reducing pricing to get more business back on the books. With the first opportunity, with signs of more policy counts and growing premium volume, we’re poised to add staff.”

Joe Ross, work-force analyst for Manpower of Kent County, said 70 percent of Grand Rapids employers expect to maintain current staffing levels.

“In the Grand Rapids area, employers expect slightly less hiring activity than in the fourth quarter when 0 percent of the companies interviewed intended to increase headcount, and percent planned to decrease it,” spokesperson David Clonan stated. “But, employers are more optimistic about hiring than they were a year ago when 20 percent of companies surveyed thought job gains were likely and 20 percent intended to cut back.”

Results for durable goods manufacturing and wholesale/retail trade were mixed. No staff level changes were expected in transportation/public utilities, education or public administration.

“I’ve been predicting hiring would be stronger in West Michigan than in the rest of the state,” said Ross. “West Michigan went into the recession sooner and harder, but it appears we’re coming out a little quicker than the rest of the state. Our survey shows the economy is holding its own and that employers are showing some optimism for the first part of 2007.”

In Kalamazoo, 10 percent of employers surveyed reported they plan to cut staff and 90 percent have no plans to change staff levels. In the Muskegon/Tri-Cities area, the survey reported that employers are more optimistic, with 33 percent planning to hire and 17 percent planning to cut, for a net of 16 percent.

Statewide, 16 percent of employers plan to increase staff and 13 percent expect reductions.

Nationwide, the survey notes that the 14,000 employers who took part appear to be more cautious about hiring than they’ve been over the past two years. Twenty-three percent intend to hire and 11 percent plan to reduce staff levels.

The Manpower Employment Outlook Survey has been ongoing for 40 years. Manpower is a $16 billion employment services company in 73 countries and territories.

An International Outlook

Manpower conducts Employment Outlook Surveys in many countries. Here are summaries of results in three countries important to Grand Rapids-area businesses.

CANADA

The survey of more than 1,700 Canadian companies showed no dramatic hiring swings for the first quarter of 2007. Seventeen percent plan to boost payrolls and 14 percent are looking at cutbacks, which is about the same as 2006. Job growth is concentrated in western Canada. Ontario companies are less optimistic, with 2 percent more planning reductions than hiring.

CHINA

A survey of 2,700 Chinese companies found a “net employment outlook” — the number of companies planning to hire minus the number planning reductions — of 18 percent for first quarter 2007. That’s improved over first quarter 2006. Transportation and utilities companies report the strongest outlook, with 28 percent anticipating staff additions.

MEXICO

Manpower’s latest survey results covered fourth quarter 2006, when the Net Employment Outlook estimated that 20 percent of Mexican companies planned to increase staff levels. That figure was led by wholesale and retail trade at 23 percent of companies, and manufacturing at 21 percent. Hiring was most optimistic in areas bordering the United States.    

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