Ukraine crisis fails to put dampener on optimism – City Comment
3 April 2014
Although the Ukrainian political crisis has dominated news channels over the past few weeks, the initial sell off in stock markets and related currencies was short lived and many European indices ended the month slightly up.
Thu, 3 Apr 2014 | Kean Marden, head of business services equity research, Jefferies International
Although the Ukrainian political crisis has dominated news channels over the past few weeks, the initial sell off in stock markets and related currencies was short lived and many European indices ended the month slightly up.
Rightly or wrongly, investors seem to have concluded that the Crimea annexation is unlikely to lead to a wider geopolitical escalation.
Putin’s efforts to reconstruct the Soviet Union have distracted attention away from an increasingly robust UK economic revival. Recent adjustments to fourth quarter GDP growth suggest that exports and business investment have been the main driver of recent progress, which runs counter to received wisdom that the foundations of recovery have been built on housing speculation and consumer debt. If correct, the likelihood of a sustainable recovery has improved.
Importantly, latest monthly data suggests that wage rate growth is on the verge of outstripping inflation. This corroborates comments made by an increasing number of you that a candidate-driven market is starting to emerge in some pockets of the UK labour market.
On the other side of the Atlantic, March employment data is keenly awaited for two reasons. Firstly, it will provide the first opportunity to assess labour market trends undisturbed by severe weather in January and February. Secondly, the release is likely to confirm that all the jobs lost between 2008 and 2010 have been recovered.
Trading updates from the sector have been virtually non-existent over the past two weeks. The exception to this was SThree which, in contrast to a disappointing final quarter last year, made a much stronger start to 2014 than expected, driven by better momentum in temp and perm. Management are clearly optimistic about the trading outlook and added 6% to consultant headcount during the quarter.
Recruiter share prices have largely trended with the FTSE100 (+2%). Main outliers include Staffline (+6%), Manpower (+5%), Hays (+5%) and Harvey Nash (+5%). Empresaria (-6%) and USG (-4%) sit at the foot of the table.
Fortunately, the pace picks up again next week when Robert Walters and Hays update investors on Q1 trading, followed shortly after by Michael Page. We have high hopes for perm fee growth, as several of you seem to have experienced a strong March.
Although the Ukrainian political crisis has dominated news channels over the past few weeks, the initial sell off in stock markets and related currencies was short lived and many European indices ended the month slightly up.
Rightly or wrongly, investors seem to have concluded that the Crimea annexation is unlikely to lead to a wider geopolitical escalation.
Putin’s efforts to reconstruct the Soviet Union have distracted attention away from an increasingly robust UK economic revival. Recent adjustments to fourth quarter GDP growth suggest that exports and business investment have been the main driver of recent progress, which runs counter to received wisdom that the foundations of recovery have been built on housing speculation and consumer debt. If correct, the likelihood of a sustainable recovery has improved.
Importantly, latest monthly data suggests that wage rate growth is on the verge of outstripping inflation. This corroborates comments made by an increasing number of you that a candidate-driven market is starting to emerge in some pockets of the UK labour market.
On the other side of the Atlantic, March employment data is keenly awaited for two reasons. Firstly, it will provide the first opportunity to assess labour market trends undisturbed by severe weather in January and February. Secondly, the release is likely to confirm that all the jobs lost between 2008 and 2010 have been recovered.
Trading updates from the sector have been virtually non-existent over the past two weeks. The exception to this was SThree which, in contrast to a disappointing final quarter last year, made a much stronger start to 2014 than expected, driven by better momentum in temp and perm. Management are clearly optimistic about the trading outlook and added 6% to consultant headcount during the quarter.
Recruiter share prices have largely trended with the FTSE100 (+2%). Main outliers include Staffline (+6%), Manpower (+5%), Hays (+5%) and Harvey Nash (+5%). Empresaria (-6%) and USG (-4%) sit at the foot of the table.
Fortunately, the pace picks up again next week when Robert Walters and Hays update investors on Q1 trading, followed shortly after by Michael Page. We have high hopes for perm fee growth, as several of you seem to have experienced a strong March.
