Survey finds increased IT hiring projections
Menlo park, Calif. — Technology executives expect information technology hiring to increase in first quarter 2013, according to the just-released Robert Half Technology IT Hiring Index and Skills Report.
In the latest quarterly survey, 17% of chief information officers (CIOs) said they plan to expand their IT departments, and 8% expect cutbacks, for a net 9% projected increase in hiring activity. This is up six points from the previous quarter’s projections. Seventy-five percent of CIOs plan to maintain their current staffing levels.
The report is based on telephone interviews with more than 1,400 CIOs from companies across the United States with 100 or more employees. The survey is conducted by an independent research firm and developed by Robert Half Technology, a leading provider of IT professionals on a project and full-time basis.
Other key findings include:
- Sixty-three percent of CIOs said it’s somewhat or very challenging to find skilled professionals today, up nine points from the previous quarter.
- Eighty-seven percent of CIOs are somewhat or very confident in their companies’ growth prospects in the next three months.
- Nearly half (49%) of technology executives expressed confidence that their firms will be investing in IT projects in the first quarter.
“CIOs report higher demand for IT professionals in the first quarter, especially for those with skills in hot areas such as applications development and IT security,” said John Reed, senior executive director of Robert Half Technology. “In the new year, we often see increased hiring as firms’ budgets for 2013 have been approved and they are able to hire additional personnel.”
Crisis averted, cargo volumes rebounding in December
Cargo volumes at U.S. ports are forecast to increase 3.9% in December following a 5.6% decline in November, according to the monthly Global Port Tracker report compiled by the National Retail Federation and Hackett Associates.
The West coast strike by workers at the ports of Los Angeles and Long Beach negatively affected container volumes in November, but resolution of the strike after eight days meant disruption in December was limited to just two days.
"After a strong kickoff on Black Friday and Cyber Monday, the holiday season is looking good and these numbers reflect that," said Jonathan Gold, NRF vp for supply chain and customs policy. "Nonetheless, we narrowly avoided what could have been a long-term disruption with the strike in Los Angeles and Long Beach and don’t want to run that risk on the East Coast and Gulf Coast. NRF is continuing to urge labor, management and lawmakers to do whatever is necessary to keep our nation’s ports running smoothly," he said in reference to the possible disruptions at East coast ports if agreements aren’t reached with organized labor prior to the December 29 expiration of a contract extension.
U.S. ports followed by Global Port Tracker handled 1.22 million twenty-foot equivalent units (TEU) in November, down from 1.39 TEUs in October. A TEU is one 20 foot cargo container or its equivalent. The November figures was 5.6% below the same month the prior year, but the December forecast for 1.27 million TEUs will see traffic rebound 3.9%.
Looking ahead, forecasted volume of 1.31 TEUs in January would represent a 2% increase followed by February at 1.15 million TEUs, up 5.9%, March at 1.27 million TEUs, up 2% and April at 1.35 million TEUs, up 3.2%.
However, those forecasts could be in jeopardy if labor agreements are not reached due to differences with the situation that occurred on the West coast.
"While the strike led to some diversion of cargo to Oakland and ports further afield, we believe much of the cargo destined for LA/Long Beach will simply arrive at the port later as vessels adjust their rotations," said Hackett Associates founder Ben Hackett. "As we look ahead into the coming months of 2013, the main threat to cargo flows through the ports would be a strike on East Coast and Gulf Coast. There is little option for diversion."
Global Port Tracker, which is produced for NRF by Hackett Associates, covers the U.S. ports of Long Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades and Miami on the East Coast, and Houston on the Gulf Coast.
DG eyes another year of record expansion
Dollar General fined tuned its full year sales and profit forecast following better than expected third quarter results that also flashed a few warning signs.
Third quarter same store sales at Dollar General increased 4% thanks to a blend of increased customer traffic and average transaction size while earnings per share of 62 cents were two cents better than analysts forecast. Total sales increased 10.3% to nearly $4 billion and profits increased 21.6% to $208 million. The store base swelled to 10,371 units as the company has opened 479 stores so far this year and is on track to open approximately 625 stores followed by 635 new units next year.
Dollar General chairman and CEO Rick Dreiling characterized the performance as solid, even through it wasn’t solid enough to bring the company’s full year profit outlook up to the level forecast by analysts.
"Dollar General delivered another solid quarter, and we expect to continue building on our strong track record of success," said Rick Dreiling, chairman and CEO. "Our same-store sales increased 4%, on top of a 6.3% improvement in the third quarter of 2011 for a two-year stack of 10.3%. We had great financial performance across key metrics. Based on these results, we are now forecasting our full year adjusted earnings per share to be in the range of $2.82 to $2.85."
The upper end of that range remains a penny below analysts’ consensus estimate as the company simply brought up the bottom end of the range from $2.77 to $2.82. The same was true of the comp forecast. Dollar General tightened its full year comp forecast to a range of 4.5% to 5%, despite forecasting a fourth quarter increase in the range of 3% to 4%. The company had previously said its full year comps would increase in the range of 3% to 5%, but that range was narrowed to 4% to 5% when second quarter results were announced in early September.
While the 4% third quarter increase was within the company’s narrowed forecast range, it was well below the prior year increase of 6.3% and also marked a sequential deceleration from the 5.1% comp increase in the second quarter. A similar situation is shaping up for the fourth quarter where Dollar General’s forecast range represent further sequential deceleration and is well below the prior year’s fourth quarter comp increase of 6.5%.
The company’s sales continue to be driven by growth in consumables with the most significant third quarter growth coming in candy and snacks and perishables areas. The company also reported that sales growth in home and seasonal categories, as well as certain basic apparel departments, was strong while sales of hanging apparel were weak.
"Although our performance over the Thanksgiving weekend and start of the holiday season has been encouraging, we continue to be cautious for the remainder of the year," Dreiling said. "We are facing a significant same-store sales comparison from our 2011 fourth quarter, which included very strong January sales, growing near-term pressures that are impacting our customers’ confidence and spending, and a challenging competitive environment. Dollar General is keenly focused on our ability to capture market share, build and maintain customer loyalty and deliver strong financial returns that support our sustainable growth for the long term."
The company’s operating margin rate expanded to 9.1% from 8.6% during the third quarter as a 10 basis point decline in gross margins to 30.9% was more than offset by an expense rate that fell to 21.8% of sales form 22.4%.
The company said the expense rate reduction was partially due to ongoing benefits of a workforce management system and a decrease in incentive compensation. That combination is potentially troubling from a longer term standpoint. Dollar General’s expansive network of small stores are already thinly staffed which suggests there is little room for a workforce management system to extract further productivity gains without negatively affecting customer service, turnover and shrink levels. Coupled with the fact that incentive compensation declined it doesn’t sound like a favorable environment in which to recruit, retain and engage front line employees needed to facilitate what is expected to be another year of record growth in 2013.