| The unemployment rate remains high as the staffing | | | | continue to be negligible until unemployment begins to |
| industry continues to struggle through this economic | | | | rebound. For those transactions that are being |
| recession. For an industry with already low profit | | | | completed, valuations are abysmal, which is a reflection |
| margins and sales dropping by 7.7% on an annual rate | | | | from of the distressed nature of most transactions. |
| through the 1st quarter of 2009 from the fourth quarter | | | | Once the industry starts to rebound, the industry should |
| 2008, it is proving to be another difficult year for many | | | | see fewer competitors in the market. This could have |
| temporary staffing companies. This is after an | | | | a positive influence on future valuations. |
| already poor 2008 performance with sales dropping | | | | Despite a recent surge from financial institutions, the |
| by 7.7% for the entire year. Many companies who | | | | U.S. economy suffers from a high jobless rate and a |
| regularly relied upon staffing firms to supply human | | | | continued downfall of production. Output fell again in |
| resources are cutting these positions in an effort to | | | | the first quarter of 2009, down another 6.1% from the |
| reduce any unnecessary costs and fight the | | | | previous quarter. Unemployment, which plagues 13.6 |
| recession. The Human Resources & | | | | million Americans, tops a decade high unemployment |
| Employment Services index, down 22.7% through | | | | rate of 8.9%. Unfortunately, the worst is still to come |
| February 27th for 2009, is a primary indicator of the | | | | for the job market; the Fed expects the jobless rate |
| general slump in demand for labor. Industry gross | | | | to reach 9.6% and not return to a healthy a level until |
| product is down another 5.1% after a 3.0% drop in | | | | 2011. Coming out of the recession, the U.S. normal |
| revenue in 2008 to highlight the staffing industry’s | | | | rate of unemployment is predicted to hit a new |
| struggles from the end of 2007 to present. The near | | | | standard of 6.5%, according to Bloomberg analysts. |
| future does not show any signs of recovery as the | | | | However, there are signs the economy has hit rock |
| U.S. government announces unemployment will remain | | | | bottom and is set to move forward. The first quarter |
| at high levels after rising another.4% in April. | | | | GDP contraction of 5.7% is less severe than the 5.5% |
| Temporary staffing will be the first to make a push as | | | | projection by many economists. Much of the |
| the economy regains health, and permanent positions | | | | progress is attributed to the 9.6% increase in durable |
| will begin falling into place once the industry | | | | goods purchases. Many economists also predict |
| approaches full strength. However, the recovery for | | | | positive output growth in the third quarter of 2009. |
| the staffing industry will not begin until early of 2011; until | | | | Consumer confidence is also at its highest since |
| then, expectations are that revenue will be down 4.3% | | | | September of 2008, according to the Conference |
| for 2009 and another 2.2% in 2010. | | | | Board’s sentiment index. |
| Middle market M&A in the staffing industry will | | | | |