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Tim Lambert
What other Industry Groups are Doing Well other than Energy?
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Natural gas outperformed all other commodity groups in 2013, as detailed in a recent article on this site.

The Wall Street Journal reported that natural gas futures rose by 26% in 2013.  For investors, that naturally brings up the matter of what other sector are doing well.  A ready answer is the workforce industry, led by firms ranging in size from Paychex (NASDAQ: PAYX) and ManpowerGroup (NYSE: MAN) to Labor SMART (OTC: LTNC).

The workforce industry is doing better for many of the same reasons that the energy sector has performed so well.

As the global economy recovers from The Great Recession, this is more of a need for oil and natural gas to power the factories and other facilities. There is also more of a demand for workers in these growing businesses.  But many companies got used to using temporary workers over The Great Recession and changed the business model in response. That resulted from the higher flexibility and lower costs of using others than full-time employees.  It is now the preferred way of operating for many enterprises.

That can be seen in the financial results of the companies in the sector.

Over the past year of market action, Paychex is up nearly 44%.  ManpowerGroup nearly doubled over that period (chart below).  Labor SMART has been reporting record revenues.  The future is bullish for the staffing sector, just as it is for energy.  Firms will continue to use project workers due to the efficiencies in operations and improvements to the bottom line of the company.  That will increase the need for the goods and services from companies in the sector.

The Affordable Care Act, or ObamaCare, makes that even more likely.

ObamaCare requires very expensive health insurance for full-time workers.  Companies are now hiring more part-time workers to avoid that expense. That is very bullish for ManpowerGroup, Labor SMART, Paychex, and others in the sector.


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