Local Economics: What goes up, must come down

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I’ve been writing for many months about the lack of employees seeking work and the dire need local businesses are experiencing to find the labor they need to get their products out the door.  Well, the tide seems to be changing quite a bit in short order on this front.  As the saying goes, “What goes up must come down.” 

The extended demand boom over the last several years might be slowing.  

You won’t hear about this in the news for a couple of months, as that’s how long it typically takes to get numbers from the likes of the Bureau of Labor Statistics and others to report job numbers, employment figures, and other items that always seem to be delayed from when we in the hiring business begin to notice things like this.

Every month when the jobs report comes out on the third Friday of the month, they report on the last month’s numbers, which is usually about 8-10 weeks after we notice those very trends.  My point is that I am seeing a genuine slowdown in hiring occurring right now, so I’m betting that around mid-June, you will be hearing about this slowdown.  

This is rather extraordinary after so many months (years, actually) of seeing an employee’s market go to levels I haven’t seen in my 24 years in the staffing business.  Many clients are sluggish to hire this year as they await orders that are happening slower than normal this year.  Why?

There are many reasons this is happening in this current cycle.  For starters, the weather.  It’s been a wetter, colder winter than normal.  The berry packing business, for example, a multi-million-dollar business in Oregon, hasn’t even begun its annual packing because the product is too wet to pack for the higher dollar uses fruit and berry packers want to get the most bang for their efforts.  They normally hire thousands of seasonal workers in March, but that didn’t happen this year.  It will in the coming weeks, but it hasn’t yet, impacting local hiring.

Another variable is what appears to be a slowdown in orders on many fronts.  One client we have manufactures accessories and products for boats, but since boat sales are off to a slow start this year, they are holding off hiring until they get the security of orders in hand.  This sort of slowdown has a domino effect, which we are clearly seeing across the many client sectors we do business with.  

And when a big kahuna like Lam Research sees a softening in orders, the impacts to many dozen Tualatin businesses here to serve Lam feel the slowdown as well.  The interconnectivity among local businesses is a real thing, and when fear is in the air, people and businesses retrench, and that’s driving a slowdown in the marketplace, and certainly hiring.  

So, while variables like weather and a slowdown in orders clearly contribute to a constricting market, consumer confidence is another component.  The impact of fear is immeasurable, but suffice it to say, fear is in the air.  Sales across many sectors are sluggish, and businesses are prudently awaiting orders before producing their goods.  It makes sense, but psychology, the fear, is a driver unto itself.  The wait-and-see attitude is slowing hiring, which is turning the tide on the employees market we’ve been experiencing for the last few years.

As Isaac Newton said over 300 years ago, “What goes up must come down.”  He’s right, and we are seeing it first-hand on the employment front. 

The sky is not falling, but caution is in the air, and those seeking jobs might want to land them sooner than later.