City Comment: Sue Dodd_2
28 March 2012
While financial markets around the world continue to balance the ongoing debt worries in the Eurozone against more positive news elsewhere, even including some better economic indicators in the US, the pause in decision making by businesses on a global scale is sending a chill into the GDP figures of several countries.
Fri, 27 Jan 2012 | By Sue DoddWhile financial markets around the world continue to balance the ongoing debt worries in the Eurozone against more positive news elsewhere, even including some better economic indicators in the US, the pause in decision making by businesses on a global scale is sending a chill into the GDP figures of several countries.
Global forecasts are being downgraded yet actual economic data has not quite yet entered the abyss. The consensus is for a global slowdown, its length in part dependent upon the euro outcome, but there are few signs that emerging markets will become heavily mired in the Western economic demise and even fewer appear interested in bailing out the euro countries. Economic news since the end of 2011 is little changed, with the Eurozone still struggling to sort out its problems. There is a feeling of déjà vu – the flurry of the Brussels concord now lost as we return to a potential Greek default and the IMF trying to plug the euro gap.Meanwhile as markets look beyond the present, the FTSE 100 has just attained its highest level in three months and is now within sight of the heady levels before last July’s mini crash. However, while recruitment shares have mainly bounced off their year-end lows, most have continued to underperform the index as concerns heighten surrounding the labour market and economic prospects in general, especially in the UK. Memories of the 2009 Q1 cliff edge are long and investors remain cautious.
A few heavyweights have already ploughed in with trading updates. Performance in the UK market has mostly softened although public sector exposure and sector mix provides incredibly diverse fortunes. First out of the blocks was Staffline indicating full-year results in line with expectations and expecting its business model to weather the uncertain economic outlook. For different reasons this is the line taken by several companies – Robert Walters, Michael Page and Hays all citing their international expansion and sector diversification strategy as they issued Q4 briefings.
Robert Walters’ net fees rose 15%, Michael Page added 13.3% but Hays only 8%, it being more impacted in the UK. All three still report good growth in parts of Europe, especially Germany and France, while Asia Pacific continues to expand. Nevertheless there is an undercurrent of considerable uncertainty and a consequent slowdown in many markets’ growth rates highlighted by Michael Page’s Steve Ingham as he explained the reduced growth rate versus Q3 and the halting of clients’ hiring plans. Other companies such as Hydrogen have signalled top end results as new sector practices combine with a rising international presence.
Global forecasts are being downgraded yet actual economic data has not quite yet entered the abyss. The consensus is for a global slowdown, its length in part dependent upon the euro outcome, but there are few signs that emerging markets will become heavily mired in the Western economic demise and even fewer appear interested in bailing out the euro countries. Economic news since the end of 2011 is little changed, with the Eurozone still struggling to sort out its problems. There is a feeling of déjà vu – the flurry of the Brussels concord now lost as we return to a potential Greek default and the IMF trying to plug the euro gap.Meanwhile as markets look beyond the present, the FTSE 100 has just attained its highest level in three months and is now within sight of the heady levels before last July’s mini crash. However, while recruitment shares have mainly bounced off their year-end lows, most have continued to underperform the index as concerns heighten surrounding the labour market and economic prospects in general, especially in the UK. Memories of the 2009 Q1 cliff edge are long and investors remain cautious.
A few heavyweights have already ploughed in with trading updates. Performance in the UK market has mostly softened although public sector exposure and sector mix provides incredibly diverse fortunes. First out of the blocks was Staffline indicating full-year results in line with expectations and expecting its business model to weather the uncertain economic outlook. For different reasons this is the line taken by several companies – Robert Walters, Michael Page and Hays all citing their international expansion and sector diversification strategy as they issued Q4 briefings.
Robert Walters’ net fees rose 15%, Michael Page added 13.3% but Hays only 8%, it being more impacted in the UK. All three still report good growth in parts of Europe, especially Germany and France, while Asia Pacific continues to expand. Nevertheless there is an undercurrent of considerable uncertainty and a consequent slowdown in many markets’ growth rates highlighted by Michael Page’s Steve Ingham as he explained the reduced growth rate versus Q3 and the halting of clients’ hiring plans. Other companies such as Hydrogen have signalled top end results as new sector practices combine with a rising international presence.
