Steady unemployment may be sign turnaround is nearing
By Yudislaidy Fernandez
Miami-Dade's steady unemployment rate, remaining at 11.7% the past two months, signals that the sluggish job market could be turning around in early 2010, a local economist forecasts.
A local staffing firm hopes that's the case as business has been slow, with most work orders coming from multinationals, not local companies.
Manuel Lasaga, business and financial economist, says the stability in the area's unemployment rate could signal that South Florida is nearing the bottom of the recession. He says the local unemployment rate, which has remained at 11.7% over July and August, is "a positive sign that might mean we've reached a plateau."
The state's unemployment rate for August was 10.9% and the country's 9.6%, each dropping 0.1 percentage point from July, the Bureau of Labor Statistics shows.
While the unemployment rate generally doesn't drop quickly, the fact that it's not growing signals a leveling off, said Mr. Lasaga, president and co-founder of business economics and finance consulting firm StratInfo, based in Miami.
Local unemployment has risen at a similar pace as the workforce.
Since April, the growth in the civilian labor force of 43,250 was close to the 48,460 growth in unemployment for the Miami-Miami Beach-Kendall metropolitan area, according to the bureau, meaning if 40,000-plus workers hadn't been added, local unemployment would only have inched up.
Mr. Lasaga says this is indicative that South Florida has been less vulnerable, probably because it doesn't have many large employers.
"We don't have a General Motors or large financial institutions here that have had financial problems. Our economy is dominated by small business, which can weather the storm better because they don't have such large overhead," he explained.
The international orientation of South Florida's economy has also been a plus, he added.
Ann Machado, president and CEO of Miami-based employment agency Creative Staffing, says more job orders are coming from multinationals than from firms dependent on the local economy.
Multinationals are hiring local employees to fill profit-generating positions such as sales and marketing as well as accounting and finance, she cited.
"Mostly positions that generate revenues, we've gone after that because we see [it] is a strong sector," she says.
Education is another strong sector, she says, as vocational schools are hiring more personnel, especially in admissions because more people are seeking vocational-type training for jobs such as medical technicians and hair stylists.
That segment is helping her staffing company at a time orders for temporary and permanent employees are fewer.
To diversify her business, she says, she's doing more work in the health sector, but even jobs in the medical field have been impacted.
Fewer orders are coming from the financial sector. The small number of requests she does get is for business development positions, she notes.
In legal jobs, those handling bankruptcy are seeing an uptick and needing to beef up their staff, she added.
Overall, she says, business has been slow this summer.
Mr. Lasaga, the economist, agrees that cutbacks in temporary unemployment have reduced work for temporary placement firms.
Ms. Machado says May was strong for the staffing industry and June fared well, but July "was horrible, you could not find anyone in staffing saying something positive was happening," she said.
In August, the firm saw more activity and September was up again, she says, but there's no stability yet because the job market is still uncertain.
"We'll have spurts when orders are coming in and then, just as easily, things can go south again," she said. "We are planning for the worse, but hoping for the best."
With autumn here, the staffing company is gearing up to meet the staffing needs of seasonal clients who hire temporary help during their peaks.
She says she's already getting personnel orders from clients in the flower and food industries and logistic companies as the holiday season nears.
She's also getting some business from companies that downsized their human resources department as the recession worsened and are now hiring her firm to fill permanent positions.
And the job needs show, she says.
Recently, a company she represents received more than 1,000 resumes for an administrative position that opened, so Creative Staffing helped review the piles of applications.
"The direct-hire business has been our savior this year, especially for multinational firms," she says.
While some professions have seen little hiring in recent months, 1,500 jobs were gained locally in the professional and business services category since April, bureau statistics show.
Economist Mr. Lasaga says a variety of jobs are included in this category, such as attorneys, accountants, consultants, engineers and architects.
"It's an important part of our economy in the sense that professional business is higher-paying jobs," he explained. "It's a key industry in this recession."
But, he says, jobs in this category have weakened substantially from previous years because the now-paralyzed construction industry generated employment for architects, engineers and other professionals in supporting fields.
But he sees a brighter 2010 for the local workforce.
Mr. Lasaga forecasts "the unemployment rate leveling off around 11% once the recovery kicks in with more momentum."
He foresees the unemployment rate falling to about 10% around the second quarter of next year. After that, he says, the recovery is likely to move slowly because of the depth of the recession.
He foresees with no building boom and other industries picking up slowly, the recovery won't have the needed boost for a faster comeback.