Gloomy NC job outlook through fourth quarter 2007

The job outlook for NC has worsened, reflecting declining economic conditions and more companies being uneasy about being overstaffed during uncertain times. A September report in the Winston-Salem Journal indicates only 10 percent of employers in the Piedmont area expect to add employees in the fourth quarter.

Winston-Salem journal
September 10, 2007
Richard Craver, journal Reporter

More local companies expect to cut jobs; just 10 percent will add positions

The local employment forecast is gloomy for the fourth quarter, with more than twice as many companies expecting to cut jobs than add, according to a Manpower Inc. survey prepared for release today.

Just 10 percent of employers in the Winston-Salem area plan to add staff in the quarter, according to the Manpower Employment Outlook. The area consists of Davie, Forsyth, Stokes and Yadkin counties.

By comparison, 23 percent of employers expect to reduce their work force. Manpower does not disclose how many employers it surveys in individual markets.

It is the second time in the past five quarters that 10 percent of area employers expressed interest in hiring over the next three months. Before the third quarter of 2006, the last time the local-hiring projection was so low was the fourth quarter of 1996.

"Employer confidence about hiring is significantly weaker as compared to a year ago," said Matt Stadler, the manager of Manpower's office in Winston-Salem. In the fourth quarter of 2006, 20 percent of employers expected to add staff and 7 percent expected to cut jobs.

The survey found that the best job prospects are in the finance, insurance, real estate and service sectors. Employers in nondurable goods manufacturing and the wholesale and retail trade sectors are the most likely to eliminate jobs.

The survey's results run counter to the messages being conveyed by several area employers pursuing cost savings through outsourcing and offshoring information. A short list includes Aon Corp., BB&T Corp., Dell Inc., GMAC Insurance, Hanesbrands Inc., Reynolds American Inc. and Wachovia Corp.

Employment officials said that thousands of jobs could be at stake, either locally or within companies' domestic operations. Some of those job cuts are expected to take place during the next three to six months.

Michael Walden, an economics professor at N.C. State University, said that companies "don't want to be caught in an overstaffed position."

"North Carolina's economic improvement has been stronger than in the nation and Southeast since the current economic expansion began in earnest in 2004," Walden said. "The first implication is that the business cycle is more volatile in North Carolina than in the rest of the country.

"The second is the broad structural transformation under way in the country, resulting from globalization, technological advances, the increased benefits from education, and more intense business competition. As evidenced by the faster changes in the occupational distribution, this transformation is happening more intensively in the state."

One local employer capitalizing on the outsourcing trend is Liberty Hardware Manufacturing Corp., which has 350 workers at Union Cross Business Park. The company said in August that it considering local and out-of-region options for a distribution expansion scheduled to open in mid-2008.

"We've had great success in hiring locally for key positions, especially with people who have been let go, or feel they are going to be let go, by local employers who are going in a different staffing direction than we are, either by outsourcing or offshoring," said Jennifer Shoffner, the vice president of human resources of Liberty's local operations. "We're attractive to people who like the fact we've had low turnover and we're committed to operating locally." Original article...