An overview of the staffing industry projections as outlined in the Staffing Industry Analysts (SIA) US Staffing Industry Forecast: April 2023 Update, and how the projections impact staffing finance.
Hi, I’m Dale Busbee, Senior Vice President, Business Development Officer at eCapital, here with a brief update on the latest trends and activity in contract staffing.
Staffing Industry Analysts recently released their updated Staffing Industry Forecast for 2023. According to the report growth is expected to slow this year due to a variety of factors including higher interest rates, more caution among clients, decreased government spending, slower wage increases, and the fact that many segments have reached record levels of temporary workers making it more challenging to grow.
As far as annual predictions for specific segments, single-digit growth is expected in most professional segments such as IT, Finance and Accounting and Engineering. Growth is also projected for Healthcare with the exception of travel nursing, which is projected to decline by 25 percent as volume and rates pull back from record levels. The Industrial segment is expected to be flat and Office Clerical may slightly decline due to the sluggish economic environment.
So how does this forecast align with what I’m seeing from a staffing finance perspective? Fairly well, overall. Higher interest rates and the recent banking turbulence means more staffing companies are seeing their bank lines capped or even reduced. Even in this slower economic environment staffing companies continue to grow and growth requires funding. Many of the companies eCapital has funded recently needed to release more working capital to support their rapid growth. I’m also seeing an increase in acquisition activity – staffing firms seeking capital to buy another firm. This could be a reaction to the economic climate, with firms looking to sell in anticipation of tougher times ahead. But it also represents a great opportunity for staffing companies to expand their reach and take advantage of a down market.
One thing we all know for sure is there’s never a dull moment in staffing. So please get in touch if you’d like to discuss how eCapital can help your staffing company or client with a fast flexible financing option. I look forward to connecting with you soon.