Wyatt Matas & Associates

The unemployment rate remains high as the staffing industry continues to struggle through this economic recession. For an industry with already low profit margins and sales dropping by 7.7% on an annual rate through the 1st quarter of 2009 from the fourth quarter 2008, it is proving to be another difficult year for many temporary staffing companies.

IT spending will increase for most government projects, there will be a reduction in spending on some projects that are used for combat missions, such as a decrease in $600 million in spending on the Future Combat Systems initiative. Therefore, Wyatt Matas and Associates believes that IT contracting firms that specialize in combat technology, to shift their research, development and staffing priorities to align more closely with President Obama’s.

The economic recession is responsible for an estimated decrease in industry revenue by 3.2 percent in 2009. Over 40 percent of IT consulting revenue comes from the banking, finance, and insurance market sectors, which makes the industry particularly vulnerable during depressed economic times. Despite the overall slide, we expect a strong surge in information technology spending during the second and third quarters of 2009 and estimate that overall IT consulting industry revenue will grow.

There will almost certainly be increased government regulation of Medicare home health care, resulting in decreasing margins, but the final cuts to Medicare reimbursement will not be as drastic as the ones proposed by the White House.

With millions Americans unemployed and left without healthcare, demand for medical services has declined. To prepare for an expected 2% drop in revenue for the third quarter of 2009, hospitals and other healthcare providers are cutting back medical staff and are covering shifts with part time nurses internally.

The freight trucking industry continues to feel the effects of volume reductions in manufacturing and retail, which comprise 67.7% of all freight trucking revenue. However, inventory levels are expected to climb, as the Conference Board Consumer Confidence Index had its largest monthly increase since September 2008: from 40.8 April 2009 to 54.9 in May 2009.