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2008 Workworld Predictions: Looking into the Crystal Ball, Part II — Outlook by Occupation/Industry & US Economic Indicators

Increasing fears of impending economic slowdown due to fallout from the subprime mortgage mess and housing market downturn suggest a weak 2008 job market.

Some promising sectors are: retail, health-care, hospitality, and export-related industries.

Let’s take a look at what various sources have to say about the 2008 outlook. First we’ll focus on articles discussing the outlook for particular occupations and/or industries. Then we’ll look at some more general articles discussing the overall state of the economy going into 2008.

– WSJ Career Journal: A Look at the Hiring Picture For Big Companies in 2008 —

Here we see primarily a “glass-is-half-full” view:

The hiring picture for 2008 appears to be one of steady growth at many of America’s biggest employers, with retiring baby boomers and the weak U.S. dollar creating new opportunities in some surprising areas.

As the nation’s employers gear up to start a wave of new-year hiring, the retail and health-care sectors are poised for the most public expansions, while the hospitality and export industries are angling for new employees as well, economists and job market experts said..

Some of the specific economic sectors addressed:

Retail:

• Wal-Mart anticipates opening 220 new stores in 2008, presently seeks to fill hundreds of entry level, supervisor and management positions, and may need considerable number more.
• JC Penney opened 50 stores in 2007 and has big plans through 2011, expecting openings for 7,500 store manager and sales associates nationwide this year.
• United Parcel Service (UPS). UPS added about 60,000 seasonal workers. Many may eventually convert to full-time employees, due to the company’s strong promote-from-within culture. UPS also “continually looks for mechanical, civil and industrial engineers; and people schooled in business, computer science and economics to add to its 360,600-employee domestic work force.”

Hospitality:

• Expected to benefit because “there’s been a lot of hotel construction and also because there are a lot of international tourists coming in to the United States.”

Healthcare:

• Continued strong demand expected “among a broad swath of positions encompassing direct patient care and allied fields,” especially “nurses, physical therapists and pharmacists.”
• CVS Caremark is coming out with about 300 “MinuteClinics” in 2008. These will require nurse practitioners. The company also will be filling positions for pharmacists and other employees in its mail, specialty & retail pharmacies.

Executives and bankruptcy lawyers:

• Executive hiring “is expected to be brisk . . . due to the ongoing trend of retiring baby boomers, with much greater opportunities in developing countries such as China and India than in the U.S.
• “While the outlook for mortgage brokers is expected to decline next year in the wake of the housing downturn, people involved in working out loans, collections or selling foreclosed real estate” may see opportunities. Same with bankruptcy attorneys.

Impact of globalization:

• “[P]rofessionals who speak multiple languages or who’ve lived in other countries may find their skills newly valuable.” Some firms will be able to take advantage of the weak U.S. dollar to explore new global markets.
• First- and second-generation Americans with continuing ties to other countries may particularly benefit .

Impact of weaker dollar:

• U.S.-manufactured goods are now more attractive overseas, “creating opportunities particularly in durable manufacturing, and in export and transportation-warehousing industries that move goods.”

Energy:

• Look to opportunities “among the traditional oil, gas and nuclear power sector and in development of ‘green’ technology and alternative energy sources.”

Professional business services:

• Growth expected notwithstanding any economic slowdown, including for “compensation and benefits experts, accountants, lawyers and consultants . . . , well as security fields ranging from guards to information technology.”

Sales:

• “Sales representatives are the No. 1 talent shortage.”

Others in demand:

• Teachers.
• Mechanics, as fewer people enter the trade despite increased demand due to proliferation of industrial machinery.
• Truck and delivery drivers.
• Laborers.
• Machine operators.

– Monster.com: Hiring Outlook 2008 —

Monster’s prediction:

Job opportunities will be best for “the entire range of creative workers who excel in the logical and mathematical in mind, for they are in intense and increasing demand in fields like systems design, electronic engineering, accounting and, yes, finance.”

Now, here’s the outlook for some specific occupational groups, according to Monster.

Finance and accounting:

• “For financial number crunchers, the globalization of business means the internationalization of the war for their talent.”
• Especially in demand: “CPAs and professionals with advanced degrees, law degrees.”

Information technology (IT):

“Offshoring of some programming work notwithstanding, prospects for information technology employment in 2008 are basically strong.”

• Look for IT opportunities in the service and healthcare sectors.
• “Data warehousing and mining, IT security, networking, virtual computing and VOIP will be hot specialties.”
• Also anticipated is an “increase in the need for entry-level programmers and auditors,” despite offshoring.

Engineering:

• A lack of new engineering graduates means shortages relative to demand.
• Look at civil and petrochemical engineering, hiring well into 2008.
• “Medical devices sector is also hot.”
• “[T]here’s great demand for product designers and mechanical and validation engineers.”
• There are also opportunities for “the buyers, planners, schedulers and project managers who work in support of these engineers.”
• “Even in the embattled Detroit auto industry, engineers will be needed, especially quality and process engineers and “[a]nything to do with more fuel-efficient vehicles.”

Manufacturing, Construction, Retail and Service Sectors

• “Alas, . . . [t]roubles with the overall economy, particularly high oil prices and the housing bust, threaten to cut employment in many sectors.”

— WSJ Career Journal: Areas Where the Labor Market Is Likely to Weaken Next Year —

This article provides more specifics from the “glass-half-empty” perspective:

“While the job market isn’t in tatters, there are plenty of loose threads — and they’re likely to unravel further next year into full-fledged holes in some industries.”

Key issues mentioned in this article:

• Continued fallout from the subprime mess.
• “[A]lmost across-the-board slowdown in employment growth.”
• This “means slower hiring, not necessarily rampant layoffs.”
• Some obvious areas to suffer the impact of lending and housing market problems include residential title companies, mortgage brokers and lenders, Realtors, construction companies, home retail and materials manufacturers, home-improvement stores and furniture retailers. Even architects and some engineers may take a hit.
• Manufacturing continues to lose jobs. Weak dollar helps U.S. exports, but this just means losing manufacturing jobs at a slower rate.
• “Automakers and related auto-parts suppliers and dealers may also see more layoffs, due to auto sales downturn.”
• “Through it all, health care is expected to remain a job-market stalwart.”
• “Educators are also in demand.
• · “Industry watchers offer mixed outlooks for technology: It’s been relatively strong of late, and may not drop off too much, though there often can be ‘churn and volatility.’”
• “Consumers hit by high gas and food prices, and the effect of lower home values on their net worth, may pull back on spending,” affecting hiring at a various retail jobs and having ripple effects elsewhere.
• Some states and regions will see weaker job markets than other.

– So — if you need to consider relocating for a job, where are the best places to look? Forbes provides some data, in: Best Cities For Jobs In 2008. —

Tops are Texas, with Austin, Fort Worth, Houston and San Antonio all ranking well; Salt Lake City; Wichita; Raleigh; Atlanta; Indianapolis; Omaha; and Seattle.

This list is based on “five data points, weighted equally: the state’s unemployment rate, job growth, income growth, median household income and cost of living.”

Because the ranking is not just based on the first two data points, it is not necessarily a guideline indicating where your best chances of finding work are (which of course also may vary depending on occupation and industry).

— Corporate recruiters are reported to “foresee increased staffing activities in 2008, despite hold-the-line company budgets coupled with recession warnings from many economists, according to a new Jobfox poll.” —

The jobfox press release (dated 12/3/07) explains:

• “Recruiting activities must continue to expand because top candidates – those with high-level skills – are instrumental to creating sustainable competitive advantages,” . . . “Top talent is even more critical in a down economy.”
• 56% of surveyed recruiters and human resource managers said recruiting and staffing activity will increase in 2008, 50% said recruiting budgets will remain at 2007 levels, and only 7% said budgets will decrease.
• “The exit of the Baby Boomers from the workplace continues to put pressure on companies to rethink recruiting strategies for 2008 and beyond.”
• “In addition to turning to new sites such as Jobfox to better reach already-employed professionals, known by recruiters as ‘passive seekers,’ recruiters are exploring groups such as retirees and stay-at-home parents as new hires.”
• 37% of corporate hiring representatives polled “are now sourcing retirees or plan to target retirees in 2008. Stay-at-home moms and dads are also on the radar screen for 22 % of the recruiters polled.”
• “The advanced professional – especially if they have proven management and communication skills – will remain in the driver’s seat in 2008,” according to jobfox.

— Workforce Management: Growth of Executive Hiring to Slow, Surveys Indicate —

“The hiring outlook for C-suite executives is one of tempered growth and sector-specific peaks and valleys, according two key sources—the ExecuNet Recruiter Confidence Index and the Association of Executive Search Consultants’ HR Executive Survey.”

• “Respondents are holding a conservative view on overall search activity.” “Yet important factors such as changes in demography are causing some employers to look beyond economic concerns and move ahead with hiring activity.”
• “The ongoing demand for products and services such as energy and health care shield certain types of executive searches from jolts in the economy.”
• “[H]iring demand will be strongest in sectors such as finance and accounting, IT technology and engineering.” Also relatively big for executive hiring: life sciences, health care, and manufacturing.

— BPOWatchIndia: Firms Decode 2008 HR Trends —

With India playing an increasingly important role in the success of American companies, we should take a moment to look at employment trends there as well. In a nutshell:

“If 2007 was the year of Indian companies going global, skyrocketing pay packages and countless job opportunities, the coming year promises to take these developments to the next level.”

• “[T]rends such as outsourcing the . . . HR function, flexible work timing and job sharing, prevalent in the West . . . will take off in India as well.”
• “[K]eeping the employee satisfied not only in terms of money but other benefits as well will be top priority for HR heads.” “There will be more facilities to help employees in terms of working from home, health and welfare benefits and retirement benefits.”
• “The 8th annual Asia-Pacific Salary Increase Survey . . . found that India ranked second this year in terms of average annual salary hike.”
• “Companies are and will increasingly resort to variable pay (such as incentives and bonuses) to reward and retain high performers.”
• “The spurt in job opportunities, too, is expected to continue in 2008. HR experts say that except manufacturing, nearly all other sectors are expected to hire robustly. Sectors like IT, retail, telecom, real estate, infrastructure and media are all going to hire in a big way.”

Finally (whew!), a few articles providing information on more general forecasts of US economic activity.

— New York Times: 2007 Was Unpredictable, but Let’s Brave 2008 Anyway –

The general tone of this article is rather gloomy. Let’s face it, we’re not set up for the greatest year economically.

Even though the collapse of the housing bubble had been long predicted, the crisis in the home loan market nonetheless took most economic prognosticators by surprise. . . .

Most analysts did not expect a mortgage crisis to disrupt financial markets as it did during the summer. . . .

Growth

“Taken as a whole, 2008 is going to be another tough year.” . . . On average, economists are forecasting a modest pace of 2% growth for 2008, down from 2007’s expected growth of about 3%, which is likely to be dragged down by a sharp deceleration in the pace of economic activity during the final quarter of the year.

While analysts say the first half of the year may be grim, many predict a pickup in activity after the summer. . . .

Analysts also expect the housing slump to bottom out in the middle of next year, as steep price discounts and better mortgage availability lure consumers back into the market. “Home-building can only go so low; house prices only need to fall so far until housing affordability is restored” . . . “The write-downs in the financial system will have occurred. Some of the problems that are weighing on psychology and activity will have been washed out of the economy by midyear.” . . .

Inflation

Though core inflation has begun to tick up, under pressure from costly food and oil, many analysts say it will be less of a problem in 2008. The slowing economy will curb wage growth . . . . With inflation contained, the Federal Reserve will feel more confident about easing interest rates, though analysts say a summer upswing in growth could lead to rate increases in the final months of the year. . . .

Employment

[T]he labor market, which steadily slowed in 2007, will run into problems in the first half of 2008.

Stock Markets

Some analysts are expecting a recovery among beleaguered shares of financial firms, as bargain hunters grab stocks down more than 10 percent from previous highs and Wall Street brokerages shovel out from the subprime mess, often with billion-dollar aid packages from foreign investors.

Others are more skeptical. “We still have billions of dollars in write-downs that have to be announced by the banks.” . . . “Financials still have to come clean and account for increasingly devalued portfolios. Until we get through all of that, we’re going to have volatile markets.”

— Bloomberg.com: Morgan Stanley Says “Mild” U.S. Recession “Likely” —

More gloom from Wall Street.

The U.S. will slip into a “mild”’ recession . . . , Morgan Stanley said in its latest research, joining Merrill Lynch in predicting a downturn for the world’s largest economy. . .

Morgan Stanley . . . forecasts growth will slow to a 0.4% pace in the current quarter, followed by declines of 0.3% in each of the first two quarters of 2008 . . . . The economy will pick up in the second half of next year, growing at an estimated 1.3%.

Consumer spending growth will slow to a 0.6% rate in the first quarter of 2008 and a 0.1% pace in the second quarter, from a 1.6% pace in the fourth quarter of 2007 . . .

For all of next year [2008], the U.S. economy will grow 1.1%, compared with an estimate of 2.2% for this year [2007]. . . .

Merrill Lynch on Nov. 26 said the economy would head into recession next year, led by a near 1% decline in consumer spending in the first half. It forecast growth for the full year at 1.4%. . .

Fed policy makers now expect U.S. gross domestic product to increase 1.8% to 2.5% in 2008. . .

— Somewhat more optimistically, see American.com: The Great Recession of 2008? —

On balance, it is not likely that the United States will experience a recession in 2008.

Most economic forecasters expect growth to continue in the 2.5% range. Employment and personal income have remained strong through October and November of 2007, so consumption spending should continue, buoying the economy.

The weak U.S. dollar makes American exports more competitive, thereby fueling economic growth and employment. Even if the economy dips in 2008, its slowdown may not last the requisite “several months” to be designated a recession by the NBER.

My conclusions?

It depends a lot on who you talk to. Nobody thinks it will be a great year for the economy and labor market. Obviously there is much uncertainty and many difficult factors in play — making economic forecasting particularly challenging at the moment. Hence a quite wide range of opinions.

Job outlook depends a lot on who you are. Some industrial sectors and occupational groups will be relatively better off, some skill sets more sought after, no matter how bad it gets.

Job outlook also depends a lot on where you are. Consider relocating — perhaps even overseas — if jobhunting is proving tough in 2008.

Photo credit: Isobel T via flickr

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