Economy Shows Growth

Economic Indicators Reveal Recovery

The economy seems to be in a steady, slow recovery and several industries have begun to show real promise for growth. With the government pouring millions, or possibly billions, into our economy it has finally started to come around.

Although we should not get too excited on the first few signs of development and growth, we do have to realize this is a vital, but also vulnerable time for businesses.

Green Shoots

The late 2000s recession, which some have dubbed “The Great Recession,” has been difficult for many businesses and workers. Trillions of dollars have been lost and gained on the stock market roller coaster, the unemployment rate has hovered at 10 per cent for months, and median home prices have dropped by about $50,000 since the record high markets of 2006. However, during the beginning of 2010 the weakened economy has started showing signs of life. “Green shoots,” or positive economic indicators, seem to be sprouting with increasing frequency. In December 2009, jobless claims dropped by almost 20,000 and stocks were on a continued rise. Applications for building permits in December rose 11 per cent, and homes are selling at a healthy clip due to lower prices and tax incentives. The Fed is doing their part by promising to keep interest rates very low for quite a while. Reports are optimistic for even more recovery gains in 2010.

Industries that Show Promise for Growth

The US Bureau of Labor and Statistics has predicted the strongest increases in employment through 2018 for these industries: scientific and technical consulting, employment services, management, restaurants services, and health care services. The two largest employment growth industries according to the BLS are expected to be professional and business services, with a 4.2 million increase in employees, and health care and social assistance, with 4 million added employees. This reflects a continued shift from manufacturing based employment towards a more service based job market. Goods producing employment is not projected to experience any growth.

Other sources are predicting growth for many of the industries that have been dealt the most significant blows during the current recession. According to a research firm in Santa Monica, California, the following are the most quickly growing industries in terms of job growth for the next five years and beyond:

• Voice over internet protocol providers: with more consumers hooking up to the internet or switching from more expensive wireless and wireline services, Voice over Internet Protocol (or VoIP) service providers can expect a huge rise in demand and will probably add about 18,000 jobs over the next 5 years. Since the VoIP provider industry only currently employs about 17,110 employees, this means that it is expected to grow by about a 15.3 per cent annualized pace.

• Private equity, hedge fund, and investment vehicles: The surprise comeback by the financial industry will mean an additional 23,500 jobs on top of the 32,000 employed by the industry in late 2009.

• Car and automobile manufacturing and new car dealers: As automobile consumers slowly begin to replace their vehicles with the new generation of hybrid or otherwise fuel efficient cars, demand for new production and sales is expected to rise.

• Single family home building and multifamily home construction

• Environmental consulting

• Search engines

• Court reporting services

• Mining, oil and gas machinery manufacturing

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