Tags: Small | Businesses | Revive | Economy

Small Businesses Revive Economy

Thursday, 24 January 2002 12:00 AM

Challenger, Gray and Christmas, an outplacement and recruitment firm, said two-thirds of job seekers found work at small businesses in the final quarter of 2001, up 22 percent from the second quarter.

"Small businesses are less insulated from changes in the economy compared to large corporations," said John Challenger, chief executive officer. "Small businesses are simply better suited to react quickly to those changes because they lack the bureaucracy common in most large corporations."

Challenger says small business hiring also led a rebound in the 1990-91 economic recession. The Challenger Job Market Index is based on data from 3,000 discharged managers and executives in a variety of industries.

National Bureau of Economic Research data said the recovery that began in April 1991 was preceded by a first-quarter spike in job seekers finding employment at small firms to 69 percent. It was a 30 percent jump from the 53 percent in the second half of 1991.

"The similarity between the current situation and 1990-1991 is not a coincidence," Challenger said. "Job seekers often discover that smaller firms are able to offer flexibility when it comes to balancing work and family. This has become increasingly important to many workers, particularly since Sept. 11."

A report issued this week by Economy.com, a subscription research Web site, predicts the Midwest will be one of the first regions to revive this spring, led by manufacturing orders and investment. Economist Steve Cochrane, citing pent-up demand for vacations, forecasts leisure travel and tourism will recover by summer in the Northeast, Pacific and South Atlantic regions. The technology sector is poised for a comeback in the fall, he said.

In his testimony before the Senate Budget Committee Thursday, Federal Reserve Chairman Alan Greenspan pointed to a number of encouraging economic signs, such as a dramatic decline in workers collecting unemployment benefits, as a sign the recession is ending.

"There have been signs recently that some of the forces that have been restraining the economy over the past year are starting to diminish and that activity is beginning to firm," Greenspan told Congress.

Challenger said he found upbeat news in a monthly survey of 2,600 small businesses by the National Federation of Independent Business that showed the percentage of small businesses planning capital expenditures in the next three to six months rose to 31 percent in December, from 29 percent in November.

The NFIB survey found 80 percent of small business owners reported difficulty in finding qualified applicants and 20 percent were seeking to fill at least one position in December.

Small businesses with fewer than 500 employees collectively are the largest employer in the United States, responsible for creating nearly two-thirds of net new jobs, according to the Small Business Administration. About 68 million people, 58 percent of all private sector employees, were employed by small businesses in 2000.

"Today, small businesses should be monitored for signs of global economic trends, since an increasing number have growing volume in the import and export of goods and services," Challenger said. "The Internet, which has made the world a smaller place on so many levels, has been a leading factor in the small business expansion into the global marketplace."

Copyright 2002 by United Press International.

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Challenger, Gray and Christmas, an outplacement and recruitment firm, said two-thirds of job seekers found work at small businesses in the final quarter of 2001, up 22 percent from the second quarter. Small businesses are less insulated from changes in the economy...
Small,Businesses,Revive,Economy
538
2002-00-24
Thursday, 24 January 2002 12:00 AM
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