The stock market remains subdued, despite the new year optimism that usually results from the holiday refresh. Hays and Michael Page did little to lift the mood this week, with downbeat trading statements for the quarter ending 31 December 2008, although bad news was widely anticipated. They both confirmed that the permanent market is falling at an accelerating rate and even the temp market is cause for concern, given the high weighting of January contract renewals. In addition, both companies saw net fee income fall by around 20% in the last quarter in the UK and are planning for further headcount reducs.

Gordon Brown’s new plans to bring forward public spending. In a recent interview, the Prime Minister stated that the government “will be able to, through public investments and public works, create probably 100,000 additional jobs over the next period of time in our capital investment programme”. We understand that the programme will focus on schools, hospitals, environmental work, infrastructure and trant.

Technical recruiter Morson seems very well placed to benefit from this fiscal stimulus, given its leading positions in the nuclear and rail sectors. An interesting aspect of the current stock market downturn is that it has been fairly indiscriminate, meaning that even well managed and growing businesses such as Morson, have seen their share price fall sharply. Interestingly, Morson’s share price has fallen in line with its more cyclical peers, despite its positive correlation to government spending.

Healthcare Locums, a leading healthcare staffing provider, also looks well positioned to benefit from increased government spending and could actually post strong perm figures even in the current market. Supporting this view, the KPMG/REC Report on Jobs published this week revealed that ursing/Medical/ Healthcare was the only sector that had not seen a decline in staffing in December. Healthcare Locums is another well-run business with good prospects for 2009.

• Michael Vassallo, equities analyst, Brewin Dolphin Investment Banking