US economic outlook — May D&B Health Tracker reveals business services growth
Strong gains in the business services and manufacturing segments are driving US job growth, according to the D&B May US Economic Health Tracker.
The tracker report highlighted some industries performing better than expected, as well as those underperforming expectations. The strongest job growth gains were in the business services and manufacturing segments, with retail, manufacturing, and construction also posting growth.
Business services firms provide services to businesses such as office administration, personnel placement, security services, cleaning and waste disposal. According to First Research, major business service companies include Automatic Data Processing, Carlson Wagonlit, Manpower, and Waste Management (all based in the US), along with Adecco (Switzerland), G4S and TUI Travel (UK), and Randstad (the Netherlands).
According to First Research, the staffing industry is the largest segment of the business services sector and will continue healthy growth in 2014 as companies take advantage of the flexiblity of using temporary workers.
The real estate sector, however, still lagged, as some regions continue a slow recovery from the housing crisis.
Ballew said he was pleased to see employment gains in some cyclical areas of the economy and in some areas that lagged in the first quarter, namely retail. US-based businesses added jobs at a stronger pace in April compared to March, with 208,000 nonfarm jobs added to the US payroll.
The Small Business Heath Index stabilized after several months of deterioration, according to the tracker. Critical weather-sensitive verticals such as construction and real estate were showing initial recovery signs at the end of 2013 but have lagged in early 2014. The construction vertical showed a slight bounce back in April 2014, but “nothing to write home about,” Ballew said.
Regions performing well include Miami, Atlanta, and Nashville, while lagging areas include Chicago, Phoenix, and Salt Lake City. “Those laggards remain laggards,” Ballew said.
Overall US business health continued to improve in April, signaling a lower risk of overall business failure. Ballew said he was pleased by the “pervasive” improvement and says the bottom line is that the private sector is “extremely healthy.” Business health in the US strengthened by 8.6 percent year over year in April 2014, the highest recorded level since December 2010.
The D&B US Economic Health Tracker offers analysis of the following three macro indicators: the D&B Small Business Health Index, D&B Jobs Health Indicator, and D&B US Business Heath Indicator. Read more in the report infographic and follow the reports on Twitter, using the #DnBEconBrief hashtag.
Tags:business health, business services, Construction, D&B economic tracker, job tracking, manufacturing, real estate, retail