December 10, 2019 – U.S. employers expect the hiring pace to remain steady into the first 90 days of 2020 though regional and industry forecasts are mixed, according to the latest “Employment Outlook Survey,” released today by ManpowerGroup. Employers in all U.S. regions and industry sectors said they were expecting headcount to grow. This is the eighth consecutive year of double-digit hiring outlooks in the U.S., according to the survey of more than 11,500 U.S. employers.
“Continued concerns over trade uncertainty are leading to some uneven market conditions in the U.S., yet the overall labor market looks resilient heading into the new year,” said Becky Frankiewicz, president of ManpowerGroup North America. “With 7 million jobs open for 11 straight months and ongoing positive hiring intentions across all industries, employers need to work harder to match people to the right roles.”
“Companies that want to hire and retain the best talent, should hire for learnability and help people develop new skills for emerging roles,” she said. “Our economic prosperity depends on helping people adapt their skills so companies can compete in a talent scarce economy.”
Hiring By Sector
Payroll gains were expected in all 13 U.S. industry sectors for the first quarter of 2020: leisure and hospitality (+30 percent), construction (+22 percent), professional and business services (+22 percent), wholesale and retail trade (+22 percent), transportation and utilities (+19 percent), government (+18 percent), durable goods manufacturing (+17 percent), education and health services (+16 percent), financial activities (+14 percent), other services (+14 percent), nondurable goods manufacturing (+13 percent), mining (+13 percent), information (+12 percent).
Hiring plans remained relatively stable in nine of the 13 nationwide industry sectors when compared with the final quarter of 2019: construction, education and health services, financial activities, government, durable goods manufacturing, nondurable goods manufacturing, mining, other services and wholesale and retail trade. In two U.S. industry sectors, employers reported slightly weaker hiring prospects in comparison with the prior quarter – professional and business services and transportation and utilities.
Hiring by Region
Employers in all four regions in the U.S. showed a positive outlook for the coming quarter. Employers in 23 percent of the businesses surveyed in the Midwest said they expect workforce gains in the first quarter of 2020. With five percent anticipating to trim payrolls and 71 percent expecting no change. Hiring sentiment was moderately stronger in three of the Midwest’s industry sectors when compared with the prior quarter: financial activities, professional and business services and wholesale and retail trade. Slightly stronger labor markets were reported for three regional industry sectors: education and health services, leisure and hospitality, and other services.
In the Northeast, 21 percent of businesses surveyed said they expect to increase payrolls in the January to March timeframe, while six percent expected a decrease and 71 percent anticipated no change. Employers in two Northeast industry sectors reported moderately stronger hiring intentions when compared with the final quarter of 2019: durable goods manufacturing and nondurable goods manufacturing. Slightly stronger outlooks were reported for three regional industry sectors: construction, financial activities, and professional and business services.
CEO Confidence Remains Moderately Optimistic
Although chief executives continue to be upbeat about the economy, their confidence levels have waned in recent months. In its most recent report, the Conference Board’s “Measure of CEO Confidence” was unchanged at 43 in the second quarter (a reading of more than 50 points reflects more positive than negative responses).
Employers expected to add to payrolls in 24 percent of businesses surveyed in the South during the forthcoming quarter. With three percent of the South’s employers expecting to trim payrolls and 72 percent anticipating no change. Leisure and hospitality sector employers in the South reported moderately stronger hiring intentions when compared with the prior quarter, while slight improvements were reported in the construction and transportation, and utilities sectors. Relatively stable hiring prospects were reported in eight of the South’s industry sectors in a comparison with the final quarter of 2019: education and health services, financial activities, government, information, nondurable goods manufacturing, other services, professional and business services, and wholesale and retail trade.
During the first quarter of 2020, employers in 22 percent of the businesses surveyed in the West said they expect to grow payrolls, while five percent said they anticipate a decline and 72 percent expected no change. Hiring sentiment remained relatively stable in four of the West’s sectors when compared with the previous quarter: financial activities, leisure and hospitality, nondurable goods manufacturing and transportation, and utilities. Professional and business services sector employers in the region said they anticipate a considerable decline in the hiring pace when compared with the prior quarter, while moderately weaker hiring intentions were reported for the durable goods manufacturing and wholesale and retail trade sectors.
Global Employment Outlook
ManpowerGroup interviewed over 58,000 employers in 43 countries and territories to forecast labor market activity in the first quarter of 2020. All participants were asked, “How do you anticipate total employment at your location to change in the three months to the end of March 2020 as compared to the current quarter?” In the ManpowerGroup research for the first quarter of 2020, employers in 42 of 43 countries and territories surveyed said they expect to grow payrolls in the period up to the end of March 2020.
When compared with the previous quarter, hiring plans strengthen in 15 of the 43 countries and territories, while employers in 23 reported weaker hiring prospects, with no change reported in five. In a comparison with last year at this time, employers in 12 countries and territories reported stronger hiring sentiments, while hiring intentions weakened in 26 and were unchanged in five. The strongest labor markets were anticipated in Greece, Japan, Taiwan, the U.S. and Romania, while the weakest hiring activity was expected in Panama, Argentina, Costa Rica, Italy and Spain.
Payroll gains were anticipated in all 26 Europe, Middle East and Africa (EMEA) region countries surveyed during the first quarter of 2020. In a comparison with the final quarter of 2019, hiring plans strengthened in 10 countries, but weakened in 12. When compared with this time one year ago, outlooks improved in eight countries, but declined in 13. Employers in Greece and Romania anticipated the strongest hiring pace during the next three months, while the weakest labor markets were forecast in Italy and Spain.
Unemployment Rate Dips Again as Economy Pushes Forward, Despite Concerns
Employers added 266,000 jobs last month as the U.S. unemployment rate dropped slightly to 3.5 percent, according to the most recent U.S. Bureau of Labor Statistics report. The increase was above the 180,000 forecast by economists. The November gain is the 110th consecutive month of job growth. The number of unemployed currently stands at 5.89 million.
Employers in all seven Asia Pacific countries and territories expected to increase headcounts during the upcoming quarter. When compared with the prior quarter, hiring plans strengthened in three countries and territories, but weakened in three. In a comparison with the same period last year, hiring prospects weakened in six countries and territories, while improving in one. The strongest hiring sentiment in the region was reported by employers in Japan and Taiwan, while the most cautious Outlook was reported in China.
In the Americas, employers in nine of the 10 countries surveyed said they expect to increase payrolls during the next three months, while Panama employers reported uncertain hiring plans and the only negative forecast globally. In a comparison with the final quarter of 2019, hiring intentions improved in two Americas countries, but declined in eight. When compared with this time one year ago, employers in three countries reported stronger hiring prospects, while outlooks weakened in seven. The region’s strongest labor markets were anticipated in the U.S. and Colombia, while the weakest hiring sentiment was reported in Panama.
Search Consultant Weighs In
“I always look forward to the Manpower report on nationwide hiring intentions,” said Richard Risch, founder, chairman and CEO of New York-based executive search firm Risch Group. “First, I am a Milwaukee boy, born and raised. So I have several close contacts at the firm who I stay in touch with to talk Packers, Brewers and, of course, hiring trends.”
“Second, it helps our firm get a macro view of the employment trends underway in various sectors and geographies,” he said. “As a boutique search firm, we are constrained from having a view that extends beyond our own relationships. So we depend on reports that confirm our view of hiring. Manpower never disappoints.”
“That said, as to the report, it coincides with what we have been experiencing in the sectors we work in so far this year,” said Mr. Risch. “In the financial services space, it has been a year of the haves and have nots. Asset managers like Neuberger Berman are killing it with substantial inflows. This despite the trend of assets moving to non-active managers. Others are struggling to retain assets and are shrinking staff size. Hedge funds have turned green for the first time in a while, with a first-quarter performance best since 2012.”
“We continue to book searches in the space,” he said. “Private equity continues to be hot space attracting new assets monthly. Lastly, many of the wealth managers are doing well, with all of them in hiring mode. The indie RIA space may be the hottest, with platforms like Dynasty providing an excellent model for independence. We continue to see work coming our way here.”
“Our tech practice is focused on cybersecurity and fintech,” Mr. Risch said. “The demand for talent in both sectors remains white hot across the entire country. We have several searches underway in both spaces. We expect that to continue for a long time. That’s the view from this small, but wired-in search firm.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media