Rocky Mountain High's Rocky Recovery Survey

Global economists-be watchful. Not all can be well in the engine of growth in the USA ,notwithstanding progress in the Asian economies of China and India and possibly, in Australia.

The Wall Street Journal says its latest forecasting survey of US economists shows a rocky road to recovery. It says the worst recession since the Great Depression has left a scorched landscape that will weigh on the labour market and the broader economy for years to come.

The 48 surveyed economists, not all of whom answer every question, expect the economy to bounce back from four quarters of contraction with 3.1% growth in gross domestic product at a seasonally adjusted annual rate in the just-ended third quarter. Expansion is seen continuing through the first half of 2010, though at a slower rate. But the massive downturn has left an open wound in the labour market that will take years to heal. On average, the economists don't expect unemployment to fall under 6% until 2013; unemployment in September hit 9.8%.

On average the economists expect the unemployment rate to peak at 10.2% next February. But even once the employment situation stops getting worse, economists expect recovery to come slowly. It took just 14 months for the unemployment rate to rise from 5.8% to its current level. On average, the economists say it will take nearly four years for the rate to drop below 6% again.

In the meantime, the unemployed will be loath to spend or borrow. They are less likely to move and are more likely to default on mortgages and loans.

The survey of economists shows they that more technical sectors are likely to yield the most jobs in years ahead. Asked to rank the sectors where job growth is most likely, some 37% of economists listed education and health services as their first choice. Another 38% listed it as their second. Professional and business services were also ranked highly with a third of economists putting the sector as their first choice and a quarter listed it as their second choice. Jobs that required less education did far worse. Just 12% said construction was most likely to create jobs in the future. Only 7% said manufacturing.

Also on Thursday, a survey issued by the Springboard Project, an independent commission under the chairmanship of William Green, head of the consultancy firm Accenture, which was promoted by the Business Roundtable, an association of chief executive officers of the largest American companies, reported that about 65% of employers said they expect all or most of their hires will be people with an associate’s degree or higher.

More than half of the 601 managers and executives surveyed said more technical skills, higher degrees and better qualifications would be a requirement required over the next four years.

Half of employers say they currently have such a serious gap between their needs and employees’ skills that it affects their productivity.

The survey says workers also understand the value of training but, like employers, are confronting barriers to making it a reality.

Sixty-two percent of workers say a convincing reason to pursue training is that the future economy will be extremely demanding, and if their skills are not up to date, someone will pass them by. However, a large proportion of workers are not pursuing training and education because of practical obstacles. Workers cite cost, convenience, and lack of reliable information on what type of training will lead to a job or higher salaries as the top three factors preventing them from enhancing their skills and improving their education.

P.S.: For Malaysians, it pays to take note that retraining for the right skills possibly at the Master's level will indeed be an asset to help you get the better jobs.