Nadine Heintz

Temp Hiring Signals Economic Recovery

Are factories filled with temps reason to rejoice?

 

When a struggling North Carolina furniture company informed Larry Nunley that its factories would stay open on Thanksgiving, he was pleased. His AccuForce Staffing, based in Tennessee, provides the manufacturer with temporary workers.

Nunley's windfall may offer the rest of us a reason to give thanks as well. Demand for temps--particularly in the manufacturing sector--has long been considered an economic bellwether. The theory is that once manufacturers sell the inventory they accumulated during the downturn, they tap additional manpower to make more products, and then hire people to market and sell them. Nunley saw a similar surge in demand in 1992, a full year and a half before then-President Clinton declared the economy on a path to recovery. "It smells awfully familiar," he says.

Othon Herrera, CEO of Talent Tree, a Houston-based temp firm, is more cautiously optimistic. Though sales are coming in "fits and starts," Herrera notes that clients--who make everything from fine crystal to boat engines--are planning temp orders six months out instead of on a week-by-week basis.

If these patterns hold, staffing firms could log double-digit revenue growth this year, says Barry Asin, of Staffing Industry Analysts, a research firm in Los Altos, Calif. As for a broader recovery, "There's no perfect correlation," says Asin, "but it's a good sign."

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