Economic Recovery Employment

Sunday, August 30th, 2009 - Blog

Economic Recovery Employment

GingerHop Hiring Notice

It is fairly clear that economically, various global economies are in recovery from recession. This is both true for countries – France, Germany – as well as sectors: car manufacture.

But it is not true of every country – the UK; every sector – steel; or every company – Toyota. Why?

Simply, its down to the timing of decision making – and, still, the banks and finance. While certain countries, sectors and companies where affected more quickly as the economy turned downward, certain companies reacted more quickly by making cuts in capacity.

Car Manufacturers

For instance, lets take motor car manufacture. The Big Three of Detroit have been hit hard by the recession, with two falling into virtual Government control. General Motors was taken apart, and its European divisions future given to the behest and decision making of the German Government, thanks to the 7,000 employees of Opel. However, having taken an early knock, the latest media coverage suggests that GM will not be selling Opel, and that various Governments are offering supporting loans, including the British, who thought that they would bear the brunt of the resulting job cuts of any new owner. The new GM could be 20% bigger than envisaged by the US Bankruptcy court. The worlds biggest car manufacturer mean while, Toyota, took its cuts late. So late in fact that as a result of increasing losses, it will shut at least one Japanese production line, and probably one British line at Burnastone.

False Recovery

There are also some false recoveries. Take the housing sector, where sales appear to be rising and hence pushing prices up, but construction still appears to be in the relative doldrums. But what is the drive for the recovery in the house sales market? From various media reports, it appears that it is in part driven by older savers and the retired buying houses for a capital return, as the national banks have reduced interest rates to encourage commercial investment. Houses are cheap, many of these older and retired savers don’t need mortgages – which are still hard to come by, but getting better – so house sales recover. But looking at house prices, they are still relatively high, and it is why some more pessimistic economists are suggesting that house process could fall by a further 20%. The reasoning for this is that at present, they are still at historic high limits of affordability, when comparing house prices to earnings. The pessimistic economists suggest – rightly I think – that earnings are unlikely to rise in the short term, and probably not for the next two+ years. As a result, teh only way house prices can rise further, is through increased lending or reduce supply – and it is the later that the busy estate agents are complaining about, with not enough houses on the market. Hence, housing is a false recovery market. Until unemployment flattens – its is still rising at high levels or 100,000 people per month in the UK – housing won’t have a sustainable recovery.

Job Search

So job seekers, what should you do? If you see a tempting job, check what the newspapers are saying about that sector, and what the company has in its own news feed about if and when it cut its capacity, including job cuts. If it has not made job cuts of at least half the decrease in its sector, or its own turnover decrease, then be wary. Much as though they may be hiring, your employment rights are compromised until having served through your own trial period, which can be a maximum of 12months in the UK. Recovery is made easy by hiring either contractors or new employees, both of which are easily disposable of should your companies recovery found to be unsustainable.

Good Luck!


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    […] Economic Recovery Employment | CV4.BIZ – The Professional CV Writing Experts – view page – cached With the apparent global economic recovery under way, what are the prospects for the job seeker? Beware would be a good summary! — From the page […]

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