Financial services, insurance, and real estate businesses hiring plans for the fourth quarter are the weakest they have been in 16 years, as a result of a contracting banking sector and the slumping housing market, a survey by
The survey predicts that hiring will be considerably lower than even a year ago. Three out of four employers in what Manpower calls the financial sector (the finance, insurance, and real estate industries) expect their employment levels to be flat or decline next quarter.
The Manpower Employment Outlook Survey found that the sectors fourth-quarter seasonally adjusted net employment outlookthe percentage of companies planning to hire minus those expecting layoffswas 5%, versus 15% a year earlier and 19% in the fourth quarter of 2006. The outlook is the most anemic since the second quarter of 1992.
Only 15% of the sectors employers planned to increase staffing, while 12% planned cuts, and 67% expected hiring levels to be flat in the fourth quarter; another 6% were unsure.
A report released Tuesday by
The report said executives anticipate a net hiring increase of 5% in the final months of this yeara projection 5 points higher than the third-quarter one. Of the 1,400 CFOs surveyed, 10% said they plan to expand, and 5% anticipate personnel reductions.
The most active hirers are expected to be companies with 20 to 49 employees, Robert Half said.
The banking industry has already experienced major cuts this year that have affected companies large and small.
In the banking sector, there is clearly still so much uncertainty, Jeffrey A. Joerres, Manpowers chief executive officer, said in an interview last week. There is an obvious contraction in certain parts of the banking business, and less activity means you need less people. And our survey indicates thats how it will continue to unfold.
Manpower surveyed 14,000 employers in all sectors during the last week of July. Only the construction industry, which has been plagued by the housing recession, forecasted a weaker employment outlook, at 2%, than the finance sector.
The overall employment outlook for all sectors was 9%. The strongest outlook was in mining (26%), the only sector whose outlook improved from a year earlier.
A report the
There is no denying that labor market conditions are deteriorating, Mark Vitner, an economist at
Several banking executives cautioned over the summer that sudden spikes in unemployment could spur higher loan default rates and cause further credit troubles for banks. Economists say such cautionary notes may increase in frequency this fall as a result of the latest data, and if that happens, it will amplify the concern that many bankers have about the prospects of a recovery before 2010.
Banks are preoccupied with capital and liquidity concerns, Richard J. DeKaser, chief economist at
Across all sectors, the Manpower survey found that 22% of employers expect to increase staffing levels next quarter, while 13% expect to cut payrolls, and 59% expect staffing levels to be flat.