Tuesday, June 10, 2008

Riding the waves

Things are definitely getting choppy out there. The upward pressure on the overall pricing levels is starting to pinch a lot of folks, along with the businesses that sell to those folks. It doesn't appear that Congress is going to do the right thing on energy, like opening up the ANWR or allowing US companies to drill for oil off of the US shoreline. So don't expect much relief on your utility bill or at the gas pump. These will trickle ... or gush, actually ... out into pressure on profits in any number of places: general & administrative expenses, travel, and in the reduction in sales of non-essential consumer goods. This has got all of the markets rather jumpy. They latch on to any piece of good news as though it were the signal that the end is in sight. But a report of the next challenge pushes them back.

But I believe that someone is making money in every market. The energy companies ... really their shareholders and employees ... are doing all right. And, it turns out, so are the IT service firms. According to the most recent labor report: "IT services firms, tagged computer systems design and related services by the government, employed 1,402,000 people in May. That's 48,600 jobs, or 3.6 percent, higher than a year earlier." -- quoted from CIO Insight. This makes sense, after all, since these are most temp firms who will pick up the slack when the employment market gets unsettled. The news media will focus on the 1% increase in unemployment. It's not a trivial number, especially for those that find themselves on the short end of that number. But these are positive signs for the IT industry. And when the seas get choppy, we need to ride it out with the recognition that the optimist is almost always proven right.

Source: CIO Insight Article by Eric Chabrow

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