Kelly's View of the Economy

Notes from a Kelly Services conference call:
 
President and CEO Carl Camden:
“We do believe that U.S. economic growth will reaccelerate mid-year.” 
 
CFO Bill Gerber:
“The U.S. economy will avoid a recession over the balance of 2007.”
 
Camden:
“The slowing U.S. economy continues to negatively affect our sales. …  Several of our large IT customers significantly reduced their temporary (employee) usage in the first quarter, but we do expect a recovery in the second half of the year.”
 
Camden:
“…We believe that fundamental economic drivers continue to be encouraging. We’re optimistic that demand for temporary workers will accelerate sometime in the middle of the year … our customers’ employment outlook remains positive. … the overall labor market remains healthy, the unemployment rate is at a six-year low, and while temporary employment has declined as a percentage of overall job creation this past year, our perm placement and temp to perm fees have remained strong and the demand for high skilled professional temporary employees is very good as well.”
 
Camden:
“… Customers are not talking about increasing layoffs, they’re not talking about shutting down facilities. So customers’ tones remain positive, not exuberant, but positive about need for more labor resources as the year unfolds.”
 
Camden:
“I think that as I talk to our customers they have learned lessons about avoiding a boom-bust that we experienced in the 1999-2000 period where there was wild scrambles at times to bring people onboard, then they had to have wild scrambles to undo that talent acquisition. I think the lesson people learned from that was to be more measured in their response, to take their time at adding resources, to take the time at undoing resources. And our customers, again, I cannot repeat too often — the customers are confident, they’re looking forward to increases and demand for their products. But it is not a wild increase in demands and most of the forward views on GDP that you’re more familiar with than I am are showing things sitting around the 2% range, the 2.5% for the year.”
 
Camden:
“We’re right now in a period of time where the small companies are creating jobs and the larger companies are in fact fairly stable. If you look at job creation this year inside of the U.S., all of the job creation is coming from companies with under 500 employees…”
 
Thanks for assistance: Voxant, Thomson Financial, CCBN, and FDCH e-Media.
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