Demand for Workers Expected To Rise

Monday, May 22nd 2000, 12:00 am

By: News On 6

NEW YORK (AP) â€” Labor markets will remain tight this summer, with demand for workers climbing to record heights as more than a third of American companies anticipate hiring new employees, a new survey reports.

In a survey of 16,000 companies, being released today by the temporary staffing agency Manpower Inc., 35 percent said they plan to expand their work force in the third quarter, while just 5 percent anticipated cutbacks. Fifty-five percent forecast no change and 5 percent were uncertain.

Overall, hiring is expected to increase 9 percent from the previous quarter, when 32 percent of respondents reported the need to recruit. Compared with the same quarter in 1999, every sector of industry is experiencing greater demand.

The increased hiring plans come at a time when unemployment in the United States is at its lowest point in three decades and Federal Reserve policy-makers are worried about the inflationary threat caused by labor shortages. The Fed has raised interest rates six times since last June in an attempt to cool economic activity to a pace of more sustainable growth, and many analysts expect further increases.

``You look at the nation's unemployment, which is at 3.9 percent, and you say 'it can't go any lower,' but when you look at the survey results you say 'it has to go lower because the demand is there,''' said Manpower president Jeffrey Joerres.

The survey, now in its 24th year, shows an unprecedented labor crunch for manufacturers of nondurable goods, such as foods and fuel, and for wholesalers and retailers, 38 percent of whom plan to recruit.

Joerres said retailers that experienced staffing shortages during 1999's winter holiday season are intent on beefing up their payrolls â€” and training those workers â€” long before Christmas.

As entry-level workers are promoted, employers from all industries are struggling to fill vacancies, boosting entry-level wages as they compete to attract jobseekers from an ever-shrinking labor pool.

Twenty-eight percent of transportation and public utility employers will seek more personnel, a hiring binge not experienced since 1979, according to Manpower data.

Joerres said the traditional labor market is ``essentially exhausted.''

Manufacturers of durable goods, such as cars and appliances, say recruiting will slow down in comparison with last quarter. But with 38 percent of respondents looking to hire, demand still outpaces seasonal expectations.

Despite the overall hiring trend â€” especially in the West, where 47 percent of construction firms said they'll be recruiting â€” the South is the only region of the United States not anticipating record highs. Also, the finance, insurance and real estate industries reported a minor decline in their demand for labor, the survey said.

The Manpower survey, which has a margin of error of plus or minus 2 percentage points, is based on telephone interviews during the first two weeks in April with public and private employers in 488 U.S. cities.