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Three reports suggest the “green shoots of recovery” spotted by Baroness Vadera and nobody else in January, may actually be making an appearance – BDO Stoy Hayward’s latest survey indicates a return of confidence to the UK economy as firms accept the realities of a recession; a more gloomy report from KPMG suggests a “faint glimmer of optimism” with two thirds of respondents believing the crisis will be over by 2011; and a new report out this morning from the Financial Times suggests that manufacturing “could be in a good position to benefit during a “rebalancing” of UK output… UK manufacturing has been hit less severely than elsewhere.”
Are we really seeing “green shoots?” For the most part, the picture remains mixed from both my personal view on the back of yesterday’s appalling stock market performance and from the feedback I hear from our Interim Executives. History shows us that stock markets have tended to ‘price in’ a downturn and therefore they begin to rise well before the downturn is over – is yesterday’s slump a sign that this has not yet happened, and therefore any upturn in optimism misplaced?
If we look at Interim placements year to date, we have seen a strong performance in retail, seen as surprising to many given that this sector has been a very high profile casualty of the downturn. Sentiment would indicate that businesses having made it through Christmas & the January Sales may be feeling more confident as per the surveys. Financial Services have also seen a marked increase in activity, suggesting that businesses are over the worst – and again, would give backing to the surveys findings.
And what of Manufacturing & Engineering? To be frank, the picture hasn’t particularly improved since January. Precision engineers with a focus on the energy, defence and aerospace sectors, and ‘niche’ manufacturers remain better placed to weather the storm than their peers who focus on consumer end-products, and this reflects the fact that they have provided 70% of potential opportunities for Interim Executives year to date. Interestingly, these have all been biased predominantly towards Gap Management and Operational roles – why no Turnaround roles?
The decline in Sterling by almost a third against leading currencies has definitely helped exporters, and as roughly half of UK exports come from manufactured goods this provides a much needed boost to the sector.
In summary, my instinct tells me there is some way to go – the decision process in terms of start dates for Interim roles remains painfully slow and a cause of great frustration to all, redundancies still loom large which in turn stalls projects earmarked to start Q1 and lessens Interim demand, banks continue to make noises about their desperate need for Turnaround specialists without taking any further action and there is pressure on day rates – mainly because of the lack of £1,000+ per day opportunities coming to the fore, creating the ‘ripple’ effect that top tier candidates are now accepting rates mid tier candidates have charged to guarantee work.
Green shoots in this spring? Well, the weather forecasters are predicting a particularly cold spring – let’s hope we get a summer!
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March 4th, 2009 at 11:23 am
Tom,
Your point about very slow decision process about interim jobs is certainly my current experience, as well as jobs just not coming to fruition after an early contact and good fit established etc.
Very frustrating!
Ian.
March 7th, 2009 at 10:38 am
Tom
I read your blog and it makes a lot of relevant observations that reflect well what I see and hear from various sources.
If I compare this to the same period in 2007 leading up to a start in April that year, I didn’t actually have to look very hard, mostly waited for phone calls and scan a few job sites, as well as keeping in touch with you guys. I actually had a choice of 5 potential assignments.
Compare that to the same period this year and its a stark contrast. The phone hardly rings, when I scan appropriate sites there are hardly any suitable projects and the agencies all tell the same tale.
What I am also finding is that when I have chanced across what appears to be a good project, I either don’t progress because the criteria is so exact that clients want every possible box ticked – with one recent example they wanted actual experience in a very niche market but still with all of the operational skills. One or two where I have made progress, I find there is inevitably the “internal candidate”, who quickly is seen as the cheapest and easiest option. Clients seem to prefer the risk of failure with short term cost saving.
Like yourself, I am surprised there is little sign of a requirement for turnaround and I would add restructuring and relocation. As manufacturing shrinks and consolidates there are a lot of “relocation” projects being discussed but again people are unwilling to pay for expert skills. I actually know of an instance where the current Warehouse Manager has been asked to manage a relocation and he readily admits he hasn’t a clue!
Anyway, your blog made interesting reading and I believe from our perspective we have to hope that with any green shoots also comes the courage and conviction to seek out experts who can actually produce the goods for improvement.