Saturday, October 25, 2014
What Are You Seeing Out There?
“What are you seeing out there?” I get this question a lot. I get it from both candidates and hiring authorities. I usually respond with a question along the lines of: “Do you mean the job market, the industry or the economy in general?” And, I usually get back “All of the above”.
So what am I seeing out there? First of all, understand that I am looking through the lens of transportation and logistics. And while it can be a pretty good indicator of overall economic activity, it is only one indicator. Secondly, the job market that I touch everyday is related to management and executive positions in the transportation, logistics and supply chain space. And that market has its own unique characteristics.
But these considerations notwithstanding, “what I am seeing” has relevance. And “what I am seeing” is a slowdown in hiring activity. It started in the summer and I thought it might be related to decision makers taking vacations and we would see things pick up in September. And we have seen a slight uptick in activity this Fall. But, it’s not enough to renew my confidence even though the number of total “job openings” across the nation has grown significantly year over year. It will be interesting to see how that growth holds up through the remainder of 2014 and into 2015. In our market, the hiring process has slowed and we are starting to see more clients “re-think” filling positions immediately. I would say that there is a growing concern about what the winter will bring and what to expect in 2015.
While freight remains strong and capacity is tight, I am starting to hear stories of downward pricing pressure in the heavy, specialized transportation segment. In my experience, this is an early indicator of an economic slowdown. Even more so, considering that overall capacity is down in that market. It will be interesting to see what happens in the flatbed and bulk sectors. To the extent those markets have benefited from the energy boom, demand there is trending down. Especially as it relates to new production. The upside is that cheaper energy will benefit other sectors of transportation and perhaps more importantly put more dollars in the consumer’s pocket. If there is one thing that may get us through the winter and 2015, it will be that cheaper energy translates to more consumer spending power.
The weakness in Europe and other foreign markets is starting to impact our economy. Of specific concern is that the manufacturing revival in the U.S. is very vulnerable to any decline in overseas demand. The political climate continues to worry and frustrate businesses while the specter of global terrorism poses a big “what if” question to every company’s strategic plan. And then there are long-term challenges related to massive government debt, a crumbling infrastructure, educating/training the next generation and figuring out how to support and care for an aging population.
Do I think the sky is falling? No. Do I think we are headed for another Great Recession? No. Do I think 2015-2016 will be up and down with more bad news than good. Yes. Will companies need exceptionally talented leaders more than ever? Yes. Will they actual hire them? Your guess is as good as mine.